Simpson Thacher has advised KKR HKE Investment on the sale of 24,692,000 shares of Kokusai Electric Corporation, a manufacturer of semiconductor production equipment, for JPY151.6 billion (USD945 million).
The block trade, which saw KKR exit from its investment in Kokusai Electric, was conducted pursuant to Rule 144A and Regulation S under the US Securities Act of 1933. The initial purchasers included Nomura Securities, JPMorgan Securities Japan, SMBC Nikko Securities, Daiwa Securities, Morgan Stanley MUFG Securities and Goldman Sachs Japan. KKR Capital Markets participated as lead managing agent.
The Simpson Thacher team included partners David Snowden and Makiko Harunari, head of the firm’s Asia banking and credit practice, as well as counsel Atsushi Usui and associates Anni Cai and Chenyu Cui.
“Simpson Thacher advised KKR in connection with the sale of its remaining shares of Kokusai Electric Corporation. With respect to regulatory and compliance matters, our role focused principally on US securities laws, including advising on the structuring and execution of the block trade to ensure compliance with applicable requirements in the context of a cross-border capital markets transaction involving shares of a Japanese-listed company,” Snowden told Asia Business Law Journal.
Snowden said the transaction was notable for two reasons – its execution amid heightened global equity market volatility and its innovative structure.
“A key challenge was managing the timing of execution in those market conditions. Another important feature was enabling KKR Capital Markets, KKR’s underwriting affiliate, to participate as ‘lead managing agent’ – a role that, to our knowledge, it had not been previously undertaken in a Japan-related capital markets transaction. Implementing that structure required careful co-ordination and analysis,” he said.
