[Translation]
October 10, 2017
To whom it may concern:
Company name:ASATSU-DK INC.

Representative:

Shinichi Ueno, Representative
Director, President & Group CEO(Code: 9747, Listed on First
Section of Tokyo Stock Exchange)

Contact:

Kaori
Nakajima,
Department
Director, Office of Corporate
Communications
Tel: 03 (6830) 3855

FAQ Regarding Tender Offer for Shares of the Company

The Company made the resolution at the board of directors meeting held on October 2, 2017 as announced on
the same day in the Company’s press releases titled “Notice Regarding Opinion on Tender Offer for Shares of theCompany by Bain Capital,” “Notice of Termination of Capital and Business Alliance with WPP Group,” and“Notice Regarding Revision of Dividend Forecast.”
Since then, there have been a number of news reports in relation to the Company’s resolution above, and theCompany has been subject to questions and inquiries, including those from shareholders of the Company.
The Company’s views regarding the content of the resolution are as detailed in each of the above press releases
published on October 2, 2017. However, the Company hereby releases the FAQ as attached to fairly provide all
relevant parties with accurate information in light of the recent news reports and other commentaries.
End

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FAQ Regarding Tender Offer for Shares of the Company
No.

Question

Response

Regarding the Tender Offer
1.

Is the Tender Offer a Management Buyout (also known as an

The Tender Offer is not an MBO. The Company’s directors and management team have no agreement

MBO)?

with Bain Capital, including agreements regarding treatment, appointment, employment, andremuneration.
The Company’s directors came to the current decision as a result of sincerely considering the Company’s
and the Company shareholders’ best interests in the harsh management environment that currently
surrounds the Company.

2.

What is the reason for the series of transactions, including the

The Company has determined that, for purpose of achieving bold reforms for the transition to a

Tender Offer?

“Consumer Activation Company,” it is essential: (i) to terminate the capital and business alliance with the
WPP Group and transition to an “open-network” group that collaborates with various business partners inaccordance with the characteristics of each business and (ii) to accelerate the reforms through thesimplification of the decision-making process by way of privatization, make the most of Bain Capital's
accumulated know-how on business improvement of its domestic and international investment portfolio,
and promptly implement bold reforms with Bain Capital’s support for human resources and management
systems.

To achieve the above initiative, the Company concluded that it is the best choice for the Company and its
shareholders to avoid the temporary disadvantage to general shareholders, such as a deterioration in
performance, and to provide the Company’s shareholders with the opportunity to sell the Company's
shares of common stock at a price with a reasonable premium, by means of the Tender Offer as part of a
privatization. With that, the Company supported the Tender Offer by Bain Capital, and decided to2

FAQ Regarding Tender Offer for Shares of the Company
No.

Question

Response
recommend that the shareholders tender their shares.

 See Item 7 below for the reason for terminating the capital and business alliance with WPP Group.

3.

Why was Bain Capital selected as a new partner?

In the course of promoting the consideration of new partner candidates in the transition to a “Consumer
Activation Company,” the Company sounded out several business companies and financial investors, but
Bain Capital was the only candidate that made a specific proposal which contributes to improving theCompany’s corporate value. Following are additional reasons that Bain Capital was considered the mostsuitable partner for the Company.
- Abundant investment records and experiences with 450 or more investments worldwide- Excellent business strategy planning and execution assistance for business improvements of invested
firms through its management consulting methods- Global company having relationships with portfolio companies worldwide- Actual achievements in Japan to expand businesses of invested companies, such as Macromill, Inc. and
BELLSYSTEM24, Inc. that offer services to corporate clients, not only by providing capital or financial
support, but also by supporting business operation at a local level, and thereby steadily executing growthstrategies, and leading numerous measures for value improvement to success- Bain Capital is a private equity fund with ample experiences, and no limitation is expected due to thebusiness field of Bain Capital, on the Company’s collaboration with various business partners dependent
on the nature of business activities when transforming into an "open-network" group.

In addition, the Company and Bain Capital also repeatedly continued to discuss the specific details of the3

FAQ Regarding Tender Offer for Shares of the Company
No.

Question

Response
Company’s managerial issues, business trends, and business strategies for each major business of theCompany and examined how to promote steady management reform after the transaction under thismatter. In addition, the Company decided that it shares the same vision with Bain Capital concerning theCompany’s intended direction of growth, and that Bain Capital would be the best partner to promotemanagement reforms to achieve the Company’s sustainable growth.

 See pages 10 through 12 of “Notice Regarding Opinion on Tender Offer for Shares of the Company
by Bain Capital” (the “TOB Press Release”) dated October 2, 2017.

4.

Can you give more information on the appropriateness of the

The Company obtained a valuation report and fairness opinion from Mitsubishi UFJ Morgan Stanleyacquisition price under the Tender Offer?

Securities Co., Ltd. (“Mitsubishi UFJ Morgan Stanley”), an independent financial advisor and third party
valuator, and the Tender Offer Price exceeds the upper range of the results of valuation using the market
share price analysis, comparable companies analysis, and DCF analysis in the valuation report obtained
from Mitsubishi UFJ Morgan Stanley.
The Company also obtained a valuation report and fairness opinion from YAMADA Business Consulting
Co., Ltd., which was independently appointed by the outside director council, consisting only of theCompany’s independent outside directors (the “Outside Director Council”), and has no interest in theTender Offer, and the Tender Offer Price in that valuation report also exceeds the upper range of the resultsof valuation using the market share price analysis, and is near the upper range of the results of valuation
using the DCF analysis.

Further, in order to ensure the fairness of the price, when determining the Tender Offer Price, the4FAQ Regarding Tender Offer for Shares of the Company
No.

Question

Response
Company negotiated the price with Bain Capital a number of times, which the Outside Director Council,
established for the purpose of protecting the Company’s shareholders’ interest, substantially participatedin. The Tender Offer Price was achieved as a result of those negotiations and meaningfully increased
through negotiations on multiple occasions.

In a simple market price comparison, the Tender Offer Price represents a premium of (i) 15.1% on theclosing price on September 29, 2017, the immediately preceding business day of the day on which theTender Offer was publicly announced, (ii) 20.7% on the simple average of the closing prices for the past
one month (before and including the immediately preceding business day of the day on which the Tender
Offer was publicly announced, the same hereinafter), (iii) 24.3% on the simple average of the closing
prices for the past three months, and (iv) 26.5% on the simple average of the closing prices for the past six
months.
Furthermore, JPY 2,153, which is the adjusted equity value per share (calculated by subtracting the value
per share of after-tax value of WPP Shares owned by the Company and excess cash and cash
equivalents from the Tender Offer Price), represents a premium of (i) 28.7% on the adjusted equity value
per share based on the closing price on September 29, 2017, the immediately preceding business day ofthe day on which the Tender Offer was publicly announced, (ii) 41.1% on the adjusted equity value pershare based on the simple average of the closing prices for the past one month, (iii) 49.8% on the adjusted
equity value per share based on the simple average of the closing price for the past three months, and (iv)
55.2% on the adjusted equity value per share based on the simple average of the closing price for the past
six months.

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FAQ Regarding Tender Offer for Shares of the Company
No.

Question

Response See pages 15 through 25 of the TOB Press Release.

5.

How did you consider the fairness of the acquisition price

Having implemented the procedures taking into account the fairness of the consideration, the Company

when deciding on the Tender Offer?

approved the Tender Offer, including the Tender Offer Price and the other terms and conditions, andrecommends all shareholders to tender their shares.
Specifically, the following matters have been presented.
(1) Examination by the Outside Director Council, consisting of the Company’s independent outside
directors (sincere discussion at over 19 meetings in total) and submission of opinion (opinion report)by the Outside Director Council(2) Acquisition of valuation report and fairness opinion from YAMADA Business Consulting Co., Ltd.,financial advisor and third party appraiser engaged independently by the Outside Director Council(3) Meaningful increase in the proposed price for the Tender Offer achieved through negotiations on
multiple occasions conducted with the substantial involvement of the Outside Director Council(4) Acquisition of valuation report and fairness opinion from third party appraisal firm independent fromthe Company(5) Advice from an external law firm
(6) Approval by disinterested directors

 See pages 15 through 19 of the TOB Press Release.

6.

What is the Company’s opinion regarding the Tender Offer?

The Company resolved at its board of directors meeting held on October 2, 2017 to express an opinion
endorsing the Tender Offer and to recommend that the Company’s shareholders tender their shares to the6FAQ Regarding Tender Offer for Shares of the Company
No.

Question

Response
Tender Offer. Accordingly, the Company would like its shareholders to consider tendering their shares to
the Tender Offer.

Termination of Alliance with WPP Group7.

Why is it necessary to terminate the capital and business

The capital and business alliance between the Company and the WPP Group initially provided a certain

alliance with WPP Group?

level of results in terms of the establishment of the corporate governance structure and the effective
investment of funds. However, a concrete plan for a collaboration that contributes to the Company’s andthe WPP Group’s interests has not subsequently been attained, and business synergy that expands mutualinterests through collaboration initially intended has not been realized.

Furthermore, the value of the WPP shares held by the Company under the capital and business alliancewith the WPP Group (the “WPP Shares”) is excessive in comparison to the scale of the balance sheet
required for the Company’s business operations, and the resulting low return on equity (ROE) and capital
structure have become problematic.

Further, differences have been realized in the Company's and the WPP Group's views on rapid changes in
the current advertising industry with regard to the business model that the Company should strive toachieve and the business partners and investment areas necessary to achieve that model, and the Company
has become aware of the situation in which it is difficult to make swift and flexible decisions that are able
to endure a changing business environment.

Under these circumstances, the Company conducted cautious internal discussions, and came to determine
7

FAQ Regarding Tender Offer for Shares of the Company
No.

Question

Responsethat terminating the capital and business alliance with the WPP Group, and then transitioning to an“open-network” group that collaborates with a variety of business partners to suit the characteristics ofeach business is necessary.

 See pages 1 through 3 of “Notice of Termination of Capital and Business Alliance with WPP Group”(the “Alliance Termination Press Release”) dated October 2, 2017.

8.

It is indicated in news reports that WPP asserts that the

In response to the Company’s press releases dated October 2, 2017, the WPP Group claimed to thetermination of the alliance agreement is invalid. Is valid

Company that the Company does not have the right to unilaterally terminate the Co-operation andtermination possible under the agreement with WPP Group? In

Alliance Agreement dated August 3, 1998 and entered into between the Company and the WPP Group (asaddition, what kind of agreement is there regarding theamended; the “CAA”) and denied the validity of the Company’s termination notice under the CAA.

procedures to sell the Company’s shares held by the WPPGroup upon the termination?

However, the CAA provides that either party may terminate the CAA at any time by giving not less than
12 months written notice. The Company gave notice on October 2, 2017 in accordance with thatprovision, seeking to terminate the CAA. We believe that the CAA will subsequently terminate 12 months
after the termination notice in accordance with the provision in the CAA.
The Company gave the termination notice after careful consideration of the validity of the termination
notice under the CAA based not only on the opinion of the attorney-at-law who was involved in the
preparation of the CAA at the time of executing the CAA, but also the opinion of several major law firms(which are experts in Japanese law, the governing law of the CAA). Accordingly, the Company
understands that a valid termination notice was given in accordance with the CAA.

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FAQ Regarding Tender Offer for Shares of the Company
No.

Question

Response
Further, upon the above termination notice, the Company also sent notice requesting sale of the shares ofcommon stock in the Company owned by the WPP Group (the “Company Share Disposal Notice”) in
accordance with the Stock Purchase Agreement dated August 3, 1998 and entered into with the WPPGroup as part of the capital and business alliance (as amended; the “SPA”).
Following is a general outline of the Company Share Disposal Notice prescribed in the SPA.
(1)

For 180 days following the giving of the Company Share Disposal Notice from the Company to the
WPP Group (the “Discussion Period”), the Company and/or a nominee designated by the Company
have the right to redeem or purchase the shares of common stock in the Company owned by the
WPP Group at such time and at such price approved by the WPP Group(2)

If the WPP Group has not approved the sale of the shares of common stock in the Company that it
holds by the time the Discussion Period has passed, then for the next following 185 days, theCompany and/or a nominee designated by the Company have the right to redeem or purchase any or
all of such shares of common stock in the Company at the average closing price of shares ofcommon stock in the Company on the Tokyo Stock Exchange, Inc. (the “Tokyo Stock Exchange”)
over the period of thirty continuous business days terminating two business days immediately prior
to the date of such redemption or purchase(3)

If the WPP Group has not sold the shares of common stock in the Company that it holds to theCompany and/or to a nominee designated by the Company by the time 365 days have passed
following the giving of the Company Share Disposal Notice, WPP Group will promptly sell any
shares of common stock in the Company that it holds through a sale or sales on the Tokyo Stock
Exchange to the members of the general public

9FAQ Regarding Tender Offer for Shares of the Company
No.

Question

Response
The Company will request the WPP Group to perform its contractual obligation to sell the Company
shares owned by the WPP Group in accordance with the above provisions pursuant to the Company Share
Disposal Notice. Specifically, the Company intends to engage in discussion with the WPP Group toreach an agreement on the sale of the shares of common stock in the Company owned by the WPP Groupin accordance with (1) above, but if an agreement is not reached during the Discussion Period, theCompany plans to request the WPP Group to sell the shares to Bain Capital or its affiliate companies inaccordance with (2) above or to sell the shares on the market in accordance with (3) above.

 See pages 4 through 5 of the Alliance Termination Press Release.

9.

Why are you selling the WPP shares held by ADK in

As explained in the Alliance Termination Press Release, the value of the WPP shares held by the Company

connection with the termination of alliance with WPP?

is excessive in comparison to the scale of the balance sheet required for the Company’s business

Have you considered ADK’s tax burden associated with theoperations, and the resulting low return on equity (ROE) and capital structure have become problematicsale of the WPP shares at that time?

for the Company. The Company therefore plans to sell the WPP shares it holds in connection with thetermination of the Capital and Business Alliance.
After careful consideration based on advice from a tax advisor, from the point of view of tax efficiency
and compliance with tax laws and regulations so as to protect shareholder’s interests with respect to thesale of the WPP shares, the Company has judged that it is inevitable that taxes such as corporation tax will
be imposed on the gain on sales realized under the current tax laws in the case of the disposition of the
WPP shares upon the termination of the Capital and Business Alliance, and it has made the decision on
this matter based on a comprehensive judgment after taking that tax burden into account.

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FAQ Regarding Tender Offer for Shares of the Company
No.

Question

Response

Revision of Divided Forecast
10.

Why is the revised dividend forecast for the year end JPY 0?

The Company considers the return of profits to the shareholders to be one of the key tasks of the
management and, based on this concept, the Company has actively endeavored to return profits throughsuch means as setting the standard for the annual total dividend payout ratio as 50% of the consolidated
net income for the year.

However, if the Company distributes year-end dividends with a record date of December 31, 2017, whichfalls after the payments for the Tender Offer have been settled, there is a possibility that the economic
outcomes would be different between the shareholders who accepted the Tender Offer and those who did
not. Therefore, in order to ensure fairness for all shareholders, the Company decided on a policy ofyear-end dividends of JPY 0 yen, on the condition that the Tender Offer is completed.

 See pages 1 through 2 of “Notice Regarding Revision of Dividend Forecast” dated October 2, 2017.

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