Kirin Holdings Co. President and Chief Operating Officer Takeshi Minakata speaks to Reuters in an interview at the company’s headquarters in Tokyo on August 28, 2024. REUTERS/Kato Kazunari
Takeshi Minamoto, who became the company’s chief executive in March, said he wanted to declare victory when Kirin’s tender offer was due to close on Wednesday but financial regulations forced it to be postponed until Sept. 11 after Hong Kong-based MY.Alpha Management raised its stake in Fancl to about 10 percent.
“We are confident,” Minakata told Reuters on Wednesday. “It’s a bit disappointing that investors have to wait another 10 days, but our position hasn’t changed and the amount hasn’t changed. We believe that Kirin Group is the best partner for FANCL.”
As of Thursday, Fancl’s market capitalization was 364.1 billion yen ($2.52 billion).
Kirin launched a 220 billion yen ($1.5 billion) tender offer in June for the roughly 70% of Fancl shares it did not already own. Kirin has since extended the offer period and increased its offer price on the back of continued share purchases by MY.Alpha.
MY.Alpha, which ran York Capital Management Global Advisors’ Asia hedge fund business, did not respond to a request for comment on its investment strategy for Fancl.
FANCL, known for its skin cleansing oils and nutritional additives, fits into Kirin’s health science portfolio, which it aims to develop into a new pillar of the group alongside alcoholic beverages and pharmaceuticals. The company aims to expand annual sales from the business to 500 billion yen, about five times higher than last year.
But getting there will likely require more than organic growth and further overseas acquisitions, Minakata said.
“Obviously, we’re looking at companies that have some degree of unique technology, products and brand,” he said. “In that sense, North America remains a big, growing market. I think it has great potential.”
Minakata joined Kirin in 1984, two years after the company first made inroads into pharmaceuticals, leveraging its fermentation know-how. He acknowledged that it may take time for consumers, especially overseas, to associate the Kirin brand with medicines and health foods rather than alcohol.
Minakata said Kirin has sufficient quality control measures in place to mitigate the risks of branching out into products with a short scientific track record, such as supplements.
“We have processes in place to ensure that we have the same level of confidence in every product, regardless of how long it has been in development,” he said.
“We need to remember that it’s not impossible,” he said. “We need to demonstrate that each of our three major businesses sees value in their own unique way, and we need to do that more effectively.”
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Reporting by Rocky Swift; Editing by Stephen Coates and Miral Fahmy
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