[Translation]
November 20, 2020
To whom it may concern:
Company Name:
Representative:

Contact:

Nitori Holdings Co., Ltd.
Toshiyuki Shirai
Representative Director & President (COO)(Securities code: 9843; First Section of theTokyo Stock Exchange, and the Sapporo
Securities Exchange)
Masaomi Zenji
General Manager, Accounting and Finance
Division
TEL: +81-3-6741-1204

Notice Concerning Amendment to "Notice Concerning Commencement of Tender Offer
for Share Certificates of Shimachu Co., Ltd. (Securities Code: 8184), and Execution ofManagement Integration Agreement with Shimachu Co., Ltd." and Amendment toTender Offer Commencement Public Notice, Associated with Submission of Amendment
to Tender Offer Registration Statement
As published in "Notice Concerning Commencement of Tender Offer for Share Certificatesof Shimachu Co., Ltd. (Securities Code: 8184), and Execution of Management Integration
Agreement with Shimachu Co., Ltd." dated November 13, 2020 (the "Press Release Dated
November 13, 2020"), Nitori Holdings Co., Ltd. (the "Company") has commenced a tender
offer (the "Tender Offer") under the Financial Instruments and Exchange Act of Japan (Act No.
25 of 1948, as amended; the "Act") for all of the shares of the common stock of Shimachu Co.,
Ltd. (securities code: 8184, First Section of Tokyo Stock Exchange, Inc.; the "Target") (the"Target Shares") (excluding the Target Shares owned by the Company and the treasury shares
owned by the Target) from November 16, 2020.
Today, the Company filed an Amendment to the Tender Offer Registration Statement for theTender Offer to the Director General of the Kanto Local Finance Bureau in accordance with
Article 27-8, Paragraph 2 of the Act, in order to amend the description in the Tender Offer
Registration Statement and its exhibit, the tender offer commencement public notice dated
November 16, 2020 (the "Tender Offer Commencement Public Notice Dated November 16,
2020"), due to the occurrence of matters that require certain amendments to the description,
including the Companys receipt of a "Notice to the Effect that Cease and Desist Order Will not
be Issued" dated November 17, 2020 and a "Notice of Shortening of Non-acquisition Period"
dated November 17, 2020 from Japan Fair Trade Commission on November 18, 2020,
regarding the acquisition of the Target Shares through the Tender Offer.
Accordingly, the Company hereby amends the content of the Press Release Dated November
13, 2020 and the Tender Offer Commencement Public Notice Dated November 16, 2020 as
below.
Amended words are underlined.
A.

Amendments to the Press Release Dated November 13, 20201

Preamble(Before Amendment)(Omitted)
With respect to the acquisition of the Target Shares through the Tender Offer (the "Share
Acquisition"), the Company filed a Prior Notification (as defined in "(II) Conditions forwithdrawal of the Tender Offer, detail of such conditions and method of disclosure ofwithdrawal" under "(9) Other conditions and methods of purchase" under "2. Outline of Tender
Offer" under "I. Tender Offer" below) with the Fair Trade Commission of Japan ("JFTC") as of
October 27, 2020, and the relevant Prior Notification was accepted on the same day.
Considering the substance of the consultation between the Company and the JFTC regarding
the Prior Notification that took place between the date of acceptance of the notification and thedate of this Press Release, the Company has determined that all of the following are reasonably
expected: (i) the expiration of the Non-acquisition Period and the Period for Measures on or
before the day preceding the last day of the Tender Offer Period; (ii) no issuance of a Prior
Notice of Cease and Desist Order (as defined in "(II) Conditions for withdrawal of the Tender
Offer, detail of such conditions and method of disclosure of withdrawal" under "(9) Other
conditions and methods of purchase" under "2. Outline of Tender Offer" under "I. Tender Offer"
below); and (iii) non receipt of any urgent temporary suspension order from the court. Thus,
the Company has confirmed the satisfaction of Condition (I) above, and has also confirmed thesatisfaction of Conditions (II) and (III) above (Regarding Condition (III) above, in DCM
Holdings Tender Offer Commencement Press Release , the tender offer period under DCM
Holdings Tender Offer is stated as the period starting from October 5, 2020 (Monday) andending on November 16, 2020 (Monday).).
(Omitted)(After Amendment)(Omitted)
With respect to the acquisition of the Target Shares through the Tender Offer (the "Share
Acquisition"), the Company filed a Prior Notification (as defined in "(II) Conditions forwithdrawal of the Tender Offer, detail of such conditions and method of disclosure ofwithdrawal" under "(9) Other conditions and methods of purchase" under "2. Outline of Tender
Offer" under "I. Tender Offer" below) with the Fair Trade Commission of Japan ("JFTC") as of
October 27, 2020, and the relevant Prior Notification was accepted on the same day.
Considering the substance of the consultation between the Company and the JFTC regarding
the Prior Notification that took place between the date of acceptance of the notification and thedate of this Press Release, the Company has determined that all of the following are reasonably
expected: (i) the expiration of the Non-acquisition Period and the Period for Measures on or
before the day preceding the last day of the Tender Offer Period; (ii) no issuance of a Prior
Notice of Cease and Desist Order (as defined in "(II) Conditions for withdrawal of the Tender
Offer, detail of such conditions and method of disclosure of withdrawal" under "(9) Other
conditions and methods of purchase" under "2. Outline of Tender Offer" under "I. Tender Offer"
below); and (iii) non receipt of any urgent temporary suspension order from the court. Thus,
the Company has confirmed the satisfaction of Condition (I) above, and has also confirmed thesatisfaction of Conditions (II) and (III) above (Regarding Condition (III) above, in DCM
Holdings Tender Offer Commencement Press Release , the original tender offer period under
DCM Holdings Tender Offer is stated as the period starting from October 5, 2020 (Monday)
and ending on November 16, 2020 (Monday).). DCM Holdings filed an Amendment to theTender Offer Registration Statement to the Director General of the Kanto Local Finance Bureau
as of November 16, 2020, and the tender offer period under DCM Holdings Tender Offer has
2been changed to the period starting from October 5, 2020 (Monday) and ending on December
1, 2020 (Tuesday).
(Omitted)
I. Tender Offer
1. Purpose of Tender Offer(1) Outline of the Tender Offer(Before Amendment)(Omitted)Also, according to the "Announcement of Opinion Regarding Tender Offer for theCompanys Shares by Nitori Holdings Co., Ltd., and Execution of Management Integration
Agreement with Nitori Holdings Co., Ltd." published by the Target on November 13, 2020
(the "Targets Announcement Press Release (Nitori Holdings)"), the Target has approvedat the meeting of the Targets board of directors that took place on November 13, 2020 theexecution of the Management Integration Agreement, and has (i) decided to agree with theTender Offer, and to recommend the Targets shareholders to tender in the Tender Offer, as
well as (ii) decided to withdraw the announced approval to, and the opinion recommending
to tender in, the DCM Holdings Tender Offer, by the resolution of the Targets board of
directors that took place on October 2, 2020. For more information about the decision of
the Targets board of directors, please refer to the Targets Announcement Press Release(Nitori Holdings) and "(IV) Process of and grounds for decision-making by the Target"
under "(2) Background and reasons to the decision to implement the Tender Offer" below.
As of the date of this Press Release, the Company does not have a full understanding of
the progress at the Target (including the Target Special Committee) in considering theManagement Integration yet, therefore the Company plans to submit an Amendment to theTender Offer Registration Statement for the Tender Offer to Director-General of the Kanto
Local Finance Bureau, in which such progress of consideration is described, promptly after
it obtains such full understanding. After the Company submits the Amendment to DirectorGeneral of the Kanto Local Finance Bureau, it will promptly announce the content.
(After Amendment)(Omitted)Also, according to the "Announcement of Opinion Regarding Tender Offer for theCompanys Shares by Nitori Holdings Co., Ltd., and Execution of Management Integration
Agreement with Nitori Holdings Co., Ltd." published by the Target on November 13, 2020
(the "Targets Announcement Press Release (Nitori Holdings)"), the Target has approvedat the meeting of the Targets board of directors that took place on November 13, 2020 theexecution of the Management Integration Agreement, and has (i) decided to agree with theTender Offer, and to recommend the Targets shareholders to tender in the Tender Offer, as
well as (ii) decided to withdraw the announced approval to, and the opinion recommending
to tender in, the DCM Holdings Tender Offer, by the resolution of the Targets board of
directors that took place on October 2, 2020. For more information about the decision of
the Targets board of directors, please refer to the Targets Announcement Press Release(Nitori Holdings) and "(IV) Process of and grounds for decision-making by the Target"
under "(2) Background and reasons to the decision to implement the Tender Offer" below.
(2) Background and reasons to the decision to implement the Tender Offer(Before Amendment)(Omitted)3

(III) Reasons why the Company is implementing the Tender Offer(Omitted)
The Company has learned from the Target’s Announcement Press Release (DCM
Holdings) that DCM Holdings made a detailed proposal for the management integration
to the Target, that DCM Holdings would commence DCM Holdings Tender Offer as ameans of management integration through making the Target a wholly-owned subsidiaryof DCM Holdings and that the tender offer period of DCM Holdings Tender Offer would
end on November 16, 2020. In addition, in the Target’s Announcement Press Release(DCM Holdings), it is stated that the Target has commenced setting up a structure
independent from DCM Holdings, the Target and DCM Holdings Tender Offer, toexamine and determine the pros and cons for DCM Holdings Tender Offer, theappropriateness of its transaction terms and fairness of the procedures. Specifically, theTarget has established the Target Special Committee comprised of independent outside
directors of the Target and consulted with such committee regarding I and II below.
(Omitted)
Therefore, the Company has made preparations for the publication of the Companys Press
Release Dated October 29 since October 2, 2020, in order to make concrete proposals to
the Target for the management integration. In DCM Holdings Tender Offer
Commencement Press Release, the tender offer period of DCM Holdings Tender Offer isstated as the period starting from October 5, 2020 (Monday) and ending on November 16,
2020 (Monday). In order to avoid a situation where DCM Holdings Tender Offer iscompleted before the commencement of the Tender Offer, the Company has decided toannounce the planned commencement of the Tender Offer on October 29, 2020.
Furthermore, the Company believes that it is important to ensure the transparency andfairness of the procedures of the Tender Offer for shareholders of the Target given that
DCM Holdings Tender Offer is ongoing. Thus, the Company has not held any discussion
with the Target since the meeting between the Company and the Target held in September
28, 2020 until the release of the Companys Press Release Dated October 29.
(Omitted)(IV) Process of and grounds for decision-making by the Target
According to the Targets Announcement Press Release (Nitori Holdings), the Target has
approved at the Targets board of directors took place on November 13, 2020 the executionof the Management Integration Agreement, and has (i) decided to agree with the Tender
Offer, and to recommend the Targets shareholders to tender in the Tender Offer, as well as(ii) decided to withdraw the announced approval to, and the opinion recommending totender in, the DCM Holdings Tender Offer, by the resolution of the Targets board of
directors took place on October 2, 2020. For more information about the decision of theTargets board of directors, please refer to the Targets Announcement Press Release (Nitori
Holdings).
As of the date of this Press Release, the Company does not have a full understanding of
the progress at the Target (including the Target Special Committee) in considering theManagement Integration yet. Therefore the Company plans to submit an Amendment to
the Tender Offer Registration Statement for the Tender Offer to Director-General of the
Kanto Local Finance Bureau, in which such progress of consideration is described,
promptly after it obtains such full understanding. After the Company submits theAmendment to Director-General of the Kanto Local Finance Bureau, it will promptly
announce the content.
(After Amendment)4

(Omitted)(III) Reasons why the Company is implementing the Tender Offer(Omitted)
The Company has learned from the Target’s Announcement Press Release (DCM
Holdings) that DCM Holdings made a detailed proposal for the management integration
to the Target, that DCM Holdings would commence DCM Holdings Tender Offer as ameans of management integration through making the Target a wholly-owned subsidiaryof DCM Holdings and that the tender offer period of DCM Holdings Tender Offer would
end on November 16, 2020. DCM Holdings filed an Amendment to the Tender Offer
Registration Statement to the Director General of the Kanto Local Finance Bureau as ofNovember 16, 2020, and the tender offer period under DCM Holdings Tender Offer has
been changed to the period starting from October 5, 2020 (Monday) and ending on
December 1, 2020 (Tuesday). In addition, in the Target’s Announcement Press Release(DCM Holdings), it is stated that the Target has commenced setting up a structure
independent from DCM Holdings, the Target and DCM Holdings Tender Offer, toexamine and determine the pros and cons for DCM Holdings Tender Offer, theappropriateness of its transaction terms and fairness of the procedures. Specifically, theTarget has established the Target Special Committee comprised of independent outside
directors of the Target and consulted with such committee regarding I and II below.
(Omitted)
Therefore, the Company has made preparations for the publication of the Companys Press
Release Dated October 29 since October 2, 2020, in order to make concrete proposals to
the Target for the management integration. In DCM Holdings Tender Offer
Commencement Press Release, the tender offer period of DCM Holdings Tender Offer
was stated as the period starting from October 5, 2020 (Monday) and ending on November
16, 2020 (Monday). In order to avoid a situation where DCM Holdings Tender Offer iscompleted before the commencement of the Tender Offer, the Company has decided toannounce the planned commencement of the Tender Offer on October 29, 2020. DCM
Holdings filed an Amendment to the Tender Offer Registration Statement to the Director
General of the Kanto Local Finance Bureau as of November 16, 2020, and the tender offer
period under DCM Holdings Tender Offer has been changed to the period starting from
October 5, 2020 (Monday) and ending on December 1, 2020 (Tuesday). Furthermore, theCompany believes that it is important to ensure the transparency and fairness of theprocedures of the Tender Offer for shareholders of the Target given that DCM Holdings
Tender Offer is ongoing. Thus, the Company has not held any discussion with the Target
since the meeting between the Company and the Target held in September 28, 2020 until
the release of the Companys Press Release Dated October 29.
(Omitted)(IV) Process of and grounds for decision-making by the Target
Meanwhile, according to the Targets Announcement Press Release (Nitori Holdings), theTarget has been engaged in the sale of furniture since its establishment in November 1969
as Shimachu Furniture Co., Ltd., and since expanding into the home center business in
April 1978, has been engaged in that business. Also, in May 1979, the Target changed its
company name from Shimachu Furniture Co., Ltd. to Shimachu Co., Ltd. It listed on theSecond Section of the Tokyo Stock Exchange in 1982, and was designated on the First
Section of the Tokyo Stock Exchange in 1991. Thereafter, under the business philosophyof aiming at building stores that are full of satisfaction, surprise and smiles to givecustomers a “special everyday,” the Target has opened stores chiefly in the metropolitan
areas of Saitama, Tokyo and Kanagawa. As of August 2020, the Target operates 60 storesto provide as much “convenience” as possible to local customers, and satisfy their needs
5concerning their homes and lifestyles.
The Target recognizes that the slow recovery the Japanese economy had been displaying
as a result of the economic and financial measures taken by the Japanese government while
being faced with US-China trade frictions, Brexit and other instabilities in the internationalarea, has suffered serious setback from the softening of consumer interest after the
consumption tax hike. In particular, it is aware that the outlook for the Japanese economy
is becoming increasingly uncertain, partly due to fears of a rapid recession in the future,
as economic activities both within and outside of Japan have been curtailed due to thenovel coronavirus (COVID-19) pandemic. The Target acknowledges that the retailbusiness continues to experience increasing rapid changes due to changes of consumer
behavior due to increased lifestyle choices available to their customers, and intensifying
competition across industry classifications. In addition, according to "Changes in Total
Annual Sales and Number of Home Centers (Estimates)" by the Japan DIY ・ HC
Association, while the Japanese home center business market has matured and has notshown much growth since 2000, there has been a slow but steady increase in the numberof home centers throughout Japan, resulting in a steep decline in sales and productivity per
store and a decrease in profitability. The Target is aware that e-commerce and individualtransactions of used goods are also accelerating consumption outside of physical retailstores, forcing companies to be more responsive to changes.
Under such circumstances, the Target believes that in order to boost sales that have beensluggish, it is of utmost importance to entice customers to visit its stores. To increase thenumber of visitors, the Target has been renovating existing stores, installing tenants,
expanding into new businesses by joining a franchise, and taking other measures toconform to the needs of the local community.
In 2018, the Target implemented a new medium-term business plan to promote structuralreform including development of stores and businesses, reformation of cost structures andimprovement of management infrastructure. While the plan is showing a certain amountof success such as increase in the number of customers at existing stores, the Target isburdened by a higher cost of sales ratio compared to its competitors in the home center
business, and must embark on a drastic reformation of its profit structure in order to secure
growth in high-rent, high-labor cost metropolitan areas.
In addition, the Target acknowledges that, to enhance purchasing power by increasing thescale of business and to launch and expand more profitable private brand (PB) products is
one of the key measures in order for the Target to radically improve its profitability.
However, the Targets sales of PB products are smaller than that of LIXIL VIVACORPORATION (PB product sales of approximately JPY 45.7 billion) and Konan Shoji
Co., Ltd. (PB product sales of approximately JPY 98.2 billion), both of which disclose
their PB product sales and for this reason, the Target recognizes enhancement of its
environment for product innovation to be a critical issue. With the home center industry
becoming increasingly oligopolistic given the fact that the top nine (9) sales companies in
the home center industry such as DCM Holdings, Cainz Corporation, KOMERI Co., Ltd.,etc. account for 62.1% of the sales in the home center industry (approximately JPY 3,798.8
billion) (Note), and while such competitors with top sales are making cost improvements
taking advantage of economies of scale, the Target recognizes that there are constraints on
the measures that could be implemented on its own without expanding the scale of its
operations, such as reducing procurement costs through bulk and large-scale purchases of
products, fixtures and equipment, and further reducing costs from within its existing6

distribution networks.
Against this backdrop, the Target has been carefully considering strategic business alliance,
and the possibility of M&A as part of such alliance, to increase the Targets corporate value
by improving its profitability.
(Note) Source: Please refer to page 8 of Diamond Home Center Industry Handbook(2019 edition).
In the process of that consideration, as stated in the Targets Announcement Press Release(DCM Holdings), the Target was approached by DCM Holdings in mid-June 2020
regarding DCM Holdings making the Target its wholly-owned subsidiary through a tender
offer and both companies engaging in a business alliance and management integration,
following which the Target began discussions with DCM Holdings. In addition to
conducting due diligence on the Target, from late July, 2020, DCM Holdings and the Target
held multiple discussions and examinations regarding the significance and purpose of the
management integration, post-management integration management policies, creation ofsynergies through the management integration and other matters.
As a result, in early September 2020, DCM Holdings and the Target reached a common
understanding regarding the synergies to be expected from the management integration of
the companies, and following that, DCM Holdings and the Target held multiple
discussions on the transaction terms and conditions, such as the purchase price per Target
Share in the DCM Holdings Tender Offer, and on the content of the management
integration agreement between the companies.
Following those discussions, as stated in the Targets Announcement Press Release (DCM
Holdings), DCM Holdings resolved at the meeting of its board of directors held on October
2, 2020 to conduct the DCM Holdings Tender Offer with a purchase price of JPY 4,200
per Target Share as part of the series of transactions for the purpose of making the Target
a wholly-owned subsidiary of DCM Holdings and delisting the Target Shares (the “DCM
Transactions”). In response to that, the Target resolved at the meeting of its board of
directors held on the same day to express an opinion supporting the DCM Holdings Tender
Offer and recommending its shareholders to tender shares in the DCM Holdings Tender
Offer.
Because the Target was approached in mid-June 2020 by DCM Holdings regarding amanagement integration between the companies as stated above, later in the same month
the Target retained Nomura Securities Co., Ltd. (hereinafter, “Nomura Securities”) as theTarget’s financial advisor independent from DCM Holdings and the Target and from the
DCM Transactions and Mori Hamada & Matsumoto as the Target’s legal advisor
independent from DCM Holdings and the Target and from the DCM Transactions.
Additionally, while the DCM Transactions do not fall under transactions with a controllingshareholder, from the standpoint of taking abundant caution in guaranteeing the fairnessof the transactions, by a resolution of the meeting of the board of directors held on June22, 2020, the Target established the Target Special Committee comprised of four members(three after the resignation of Mr. Tajima), being Mr. Hikari Imai (Independent Outside
Director of the Target; former Vice-Chairman of Merrill Lynch Japan Securities Co., Ltd.),
Mr. Yasushi Kubomura, (Independent Outside Director of the Target; attorney-at-law andthe managing partner of Kubomura Law Office), Mr. Kouji Tajima (Independent Outside
Director of the Target; tax accountant and the managing partner of Kouji Tajima Tax
Accountant Office; Mr. Tajima resigned from his positions on September 4, 2020 due to7his death on the same date), and Mr. Hidehiko Nishikawa (Independent Outside Directorof the Target; Professor of the Faculty of Business Administration and Graduate School ofBusiness Administration of Hosei University), and received a findings report on the DCM
Transactions from the Target Special Committee on October 2, 2020.
Further, although the DCM Holdings Tender Offer was commenced as planned on October
5, 2020, the Company announced on October 29, 2020 its plan to conduct the Tender Offer,and the Target received from the Company an “Opinion Statement on Management
Integration” regarding the Tender Offer. Therefore, the Target decided to begin considering
the Company’s proposals, which include transactions for the purpose of making the Target
its wholly-owned subsidiary through the Tender Offer and a series of the procedures to betaken thereafter (the “Transactions”), and in order to ensure fairness and take the utmost
care in regard to that consideration, the meeting of the board of directors held on that day
requested the Target Special Committee to submit its opinion in regard to the matters I andII below (the “Consulted Matters”), which are the same matters as in regard to the DCM
Transactions.
I. (a) To consider and determine the appropriateness of the Transactions, including theTender Offer, from the perspective of whether or not they will contribute to theenhancement of the Target’s corporate value, and (b) to consider whether or not theboard of directors of the Target should express its support of the Tender Offer andwhether or not to recommend that the shareholders of the Target tender their sharesin the Tender Offer, and to make a recommendation to the board of directors of theTarget, in examination and determination of the appropriateness of the terms andconditions of the Transactions and the fairness of the procedures, from theperspective of promoting the interests of the general shareholders of the Target.
II. To consider whether the following decisions on the Transactions, including theTender Offer, made by the board of directors of the Target is not detrimental to thegeneral shareholders of the Target, and to state its opinion to the board of directorsof the Target: (i) a decision to express its opinion to support the Tender Offer andrecommend that the Target's shareholders tender their shares in the Tender Offer, and(ii) a decision on the procedures for making the Target a wholly-owned subsidiarythrough a demand for sale of shares or a share consolidation, etc., to be implemented
after the Tender Offer as part of the Transactions.
In addition, in the same way as with the DCM Transactions, the Target’s Board of Directors
has determined that decisions regarding the Transactions, including approval ordisapproval of the Tender Offer, shall be made by the board of directors of the Target, inutmost respect of the judgment of the Target Special Committee, and that if the Target
Special Committee determines that the implementation of the Tender Offer or the terms
and conditions of the transaction are not appropriate, the board of directors of the Target
shall not express its support of the Tender Offer. Furthermore, the Target’s Board of
Directors has confirmed that authority, etc. regarding negotiations with the Company is
the same as in the DCM Transactions, meaning that it authorizes the Target Special
Committee to (i) substantially participate in the process of negotiation between the Target
and the Company (including, as necessary, giving instructions or requests regarding thenegotiation policy with the Company and negotiating with the Company on its own); (ii)in reporting on the Consulted Matters, appoint its own financial and legal advisors at theTarget’s expense, or to designate or approve (including post-approval) the Target’s
8advisors regarding the Target’s financial or legal matters, as necessary; (iii) receive, as
necessary, information from directors and employees of the Target that is required for themto review and make decisions regarding the Transactions; and (iv) grant authority over any
other matters deemed necessary by the Target Special Committee for the consideration anddetermination of the Transactions.
The Target Special Committee has again, in relation to the Transactions, confirmed thelevel of independence, expertise, and past results, etc. of Nomura Securities, the Target’s
financial advisor and third-party valuation organization, Mori Hamada & Matsumoto, theTarget’s legal advisor, and Plutus Consulting Co. , Ltd. (hereinafter, “Plutus”), the Target
Special Committee’s financial advisor and third-party valuation organization.
On October 29, 2020, the Target received a proposal from the Company regarding theterms and conditions of the Transactions, including setting the Tender Offer Price at JPY
5,500; accordingly, the Target held a meeting of its board of directors on that day, begandeliberating on the Transactions, and has subsequently engaged in repeated discussions
and negotiations with the Company regarding the terms and conditions of the Transactions,
including the Tender Offer Price.
Specifically, the Target considered that proposal taking into account advice from Nomura
Securities and Mori Hamada & Matsumoto and confirmed the opinion of the Target
Special Committee, following which it held a meeting with the Company on November 1,
2020, at which the Target received explanations from the Company regarding thesignificance of the Transactions, the terms and conditions of the Transactions including
the Tender Offer Price, the synergies that can arise from the Transactions, and other suchmatters and engaged in questions and answers regarding these matters with the Company.
Taking the results of the meeting into account, the board of directors met on the same day
and deliberated.
In addition, based on the above discussions between the Target and the Company, the viewsof the Targets management on the proposal of the Company, and the advice from Nomura
Securities and Mori Hamada & Matsumoto, etc., the Target Special Committee held ameeting with the Company on November 4, and received explanations from the Company
on the significance of the Transactions, the terms and conditions of the Tender Offer andthe management policies after the Tender Offer. In addition to these matters, the Target
Special Committee conducted a question-and-answer session with the Company on thebusiness alliance to realize the synergy to be created through the Transactions and the
management system of the Target, etc., and based on the results thereof, discussed with
the Targets management. Moreover, taking the results of that meeting into consideration,
the Target held the meeting of its board of directors on November 5, and deliberated on
the benefits and disadvantages of the Transactions and the content of the Management
Integration Agreement taking into account matters such as the results of the discussions
between the Target Special Committee and the Company stated above, following which,on November 6, it held discussions with the Company regarding the content of theManagement Integration Agreement, while following the advice from Mori Hamada &Matsumoto. On November 7, the Target Special Committee considered the content of theManagement Integration Agreement taking into account matters such as the results ofdiscussions with the Company, and on November 8, the Target held a meeting of its boardof directors at which it deliberated on the content of the Management Integration
Agreement and the Transactions. Following that, on November 9, 2020, the Target’s
management and the Target Special Committee held a meeting with the Company and9again engaged in discussions regarding matters such as the synergies to be created throughthe Transactions and the content of the Management Integration Agreement. As a result,the Target and the Company reached a common understanding that (i) the synergies
described in “(1) Overview of the Tender Offer” above can be expected to be achieved
through the Management Integration, (ii) after the Company makes the Target a subsidiarythrough the Tender Offer, measures should be promptly taken to quickly achieve thosesynergies, and (iii) a management integration agreement that provides for matters such asa business alliance between the two companies and the management systems of the Target
after the Tender Offer should be executed in order to achieve those synergies.
On November 9, 2020, the Target Special Committee sent a letter to DCM Holdings asking
whether or not it plans to increase the purchase price in the DCM Holdings Te nder Offer
to the Tender Offer Price or above, and if it does, what the specific price would be; however,as of November 12, 2020, DCM Holdings has not indicated any plan to change thepurchase price in the DCM Holdings Tender Offer or such specific price .
The minimum planned purchase quantity in the Tender Offer is set at 19,477,600 shares(ownership ratio: 50.00%), but in regard to setting the minimum not as a two-thirds
ownership ratio but rather a majority (equivalent to 50.00%), as stated in the Targets
Announcement Press Release (DCM Holdings), the Target verified the reasonableness ofthe minimum planned purchase quantity in the Tender Offer by, among other things,
receiving a report from an outside advisor regarding the percentage of shares in the Target
Shares that are considered to be held under the policy of not tendering in a tender offer
regardless of the appropriateness of the terms of the transaction, including shares held in
passive index funds.
On November 13, 2020, the Target received a report (the “Findings Report”) from theTarget Special Committee stating that (1) it considers that the board of directors of theTarget should support the Tender Offer and recommend that the shareholders of the Target
tender their shares in the Tender Offer; and (2) it considers that the following decisions on
the Transactions, including the Tender Offer, made by the board of directors of the Target
are not detrimental to the general shareholders of the Target: (i) decision to express its
opinion to support the Tender Offer and recommend that the Targets shareholders tendertheir shares in the Tender Offer, and (ii) decision on the procedures for making the Target
a wholly-owned subsidiary through a demand for sale of shares or a share consolidation,etc., to be implemented after the Tender Offer as part of the Transactions. Additionally, theFindings Report also states an opinion that the Target Special Committee considers that
the Target’s Board of Directors should withhold its opinion in regard to whether or not it
supports the DCM Holdings Tender Offer and whether or not it recommends that theTarget’s shareholders tender their shares in the DCM Holdings Tender Offer.
In addition to the Findings Report, the Target has received from the Target Special
Committee a share valuation report regarding the results of the valuation of the Target
Shares, which was submitted by Plutus on November 12, 2020 (the “Share Valuation
Report (Plutus)”), and a fairness opinion (the “Fairness Opinion”) to the effect that theTender Offer Price of JPY 5,500 per share is fair to the general shareholders of the Target
from a financial point of view.
Under the process described above, taking into account the legal advice received from
Mori Hamada & Matsumoto, the advice from a financial perspective received from
Nomura Securities, and the share valuation report regarding the results of the valuation of10

the Target Shares submitted on October 1, 2020 (the “Share Valuation Report (Nomura)”),as well as the Share Valuation Report (Plutus) and the Fairness Opinion submitted throughthe Target Special Committee, and in utmost respect of the judgment of the Target Special
Committee presented in the Findings Report, at the meeting of the board of directors of
the Target held on November 13, 2020 carefully discussed and deliberated on whether or
not the Transactions, including the Tender Offer, would contribute to the enhancement of
the Targets corporate value, and whether or not the terms and conditions of theTransactions, including the Tender Offer Price and those to be agreed upon in theManagement Integration Agreement, are appropriate.
As a result, the Target has also concluded that in the Transactions, the execution of theManagement Integration upon conclusion of the Management Integration Agreement,
which sets forth the business alliance between the Company and the Target and otherframeworks regarding the business operations of both companies after the Management
Integration, will enable the creation of the synergies described above in “(1) Overview of
the Tender Offer” while maintaining the Target’s identity, such as its trade name and brand,
and will contribute to the enhancement of the Target’s corporate value.
As stated in the Targets Announcement Press Release (DCM Holdings), in regard to the
DCM Transactions as well, the Target determined that it could expect synergies due to thecomplementary nature of the two companies’ businesses. In particular, the DCM HoldingsGroup has many existing PB products in the home center field, and the Target expectedthat sharing those products would greatly contribute to expanding the Target’s sales andimproving its profit margin, and that those effects could be achieved in a short period oftime.
In contrast, as the Company has not focused on the home center business up until now, atpresent, the Target acknowledges that it does not have many PB products in the home
center field. However, the Target believes that the Company does possess functions andknow-how that it cultivated in its unique business model as a “Manufacturing, Logistics,
IT and Retail Sales” business (functions and know-how relating to the vertically-integrated
supply chain of the Company, through which it established functions for everything fromproduct planning to manufacturing, distribution, and sales), and that in the mid- to longterm, by utilizing those functions and know-how, it will be possible to enhance its
environment, expand its sales, and improve its profit margin for product development
including PB products, which the Target has set as an issue to address, in addition to which
it will be possible to achieve greater and further-reaching synergies such as not only
reducing procurement costs through economies of scale, but also reducing costs andimproving customer satisfaction by utilizing the centrally-managed logistics functions of
the Company Group (including existing logistics bases and distribution networks as well
as systems for total management from when a customer places an order until delivery iscomplete), expanding sales opportunities by utilizing online sales (e-commerce)foundations of the Company Group (which has JPY 44.3 billion in annual sales) and jointly
implementing measures, and expanding opportunities to open stores using the store
development capabilities of the Company Group, which has strong capabilities forgathering information on store candidates, designing stores, and the like. Additionally, asa result of repeated discussions with the Company, on the basis that there is differentiation
between the two companies’ furniture brands in regard to price range and customer
preferences and that the Target’s brand will take a leading role in the home center field,
the Target has confirmed that the Company intends to maintain both companies’ brands
and to expand business nationwide and overseas using the Target’s brand through the11Target utilizing the business base of the Company; accordingly, the Target has determinedthat in the mid- to long-term, the potential to expand the Target’s business is greater with
the Transactions and that it is possible to further increase the Target’s corporate value
thereby.
The Target also determined from the following points, etc. that the Tender Offer Price (JPY5,500 per share) was an appropriate price that ensured the benefit that should be received
by the Target’s general shareholders and that the Target’s general shareholders are being
provided with a reasonable opportunity to sell the Target Shares with an appropriate
premium.
I. The Tender Offer Price is significantly greater than the purchaser price in the DCM
Holdings' Tender Offer (JPY 4,200 per share). (Additionally, the Target and theTarget Special Committee asked DMC Holdings whether or not it planned to increase
the purchase price in the DCM Holdings' Tender Offer to the Tender Offer Price orabove, and if it does, what the specific price would be, but as of November 12, 2020,
DCM Holdings had not expressed any plan to change the purchase price in the DCM
Holdings' Tender Offer or what the specific price would be.
Ⅱ. The Tender Offer Price is a price that considerably exceeds the upper limit of thevaluation range of the market stock price method, the upper limit of the valuation rangeof the comparable company analysis method, and the upper limit of the valuation rangeof the DCF method out of the valuation results of the Target Shares by Nomura
Securities in the Share Valuation Report (Nomura).
Ⅲ. The Tender Offer Price is a price that considerably exceeds the upper limit of thevaluation range of the market stock price method, the upper limit of the valuation rangeof the comparable company analysis method, and the upper limit of the valuation rangeof the DCF method out of the valuation results of the Target Shares by Plutus in the
Share Valuation Report (Plutus). Regarding the Tender Offer Price, the Fairness
Opinion was received from Plutus to the effect that the Tender Offer Price is fair to theTarget’s minority shareholders.
Ⅳ. The Tender Offer Price has a premium of 91.10% (rounded to two decimal places;
hereinafter the same in the premium figures (%) in this item) compared to the closing
price of the Target Shares of JPY 2,878 on the First Section of Tokyo Stock Exchange
on September 18, 2020 (the day on which some news media reported the speculation
about the DCM Holdings' Tender Offer after the trading hours of the stock market on
the same date), a premium of 88.10% over the simple average closing price of JPY 2,924(rounded to the nearest yen; hereinafter the same in calculating the simple averageclosing price in this item) for the one month prior to September 18, 2020, a 86.76%
premium over the simple average closing price of JPY 2,945 for the three months prior
to the same date, and a 93.05% over the simple average closing price of JPY 2,849 forthe six months prior to the same date.
Ⅴ. The Tender Offer Price is found to be reasonable in the findings report obtained fromthe Target Special Committee.
The Target resolved at the meeting of its board of directors stated above to retract its
12opinion announced on October 2, 2020 in regard to the DCM Holdings Tender Offer (i.e.,
its opinion supporting the DCM Holdings Tender Offer and recommending its
shareholders to tender shares in the DCM Holdings Tender Offer) and to withhold its
opinion regarding whether or not it supports the DCM Holdings Tender Offer and whether
or not it recommends its shareholders to tender shares in the DCM Holdings Tender Offer.
For details, please see the "Announcement of Amended Opinion Regarding Tender Offer
for the Company’s Shares by DCM Holdings Co., Ltd." released by the Target on
November 13, 2020.
(9) Other conditions and methods of purchase(II) Conditions for withdrawal of the Tender Offer, detail of such conditions and method of
disclosure of withdrawal(Before Amendment)
Upon occurrence of any of the matters as provided in Article 14(1)(i)(a) through (i) and (l)through (s), (iii)(a) through (h) and (j), (iv) and Article 14(2)(iii) through (vi) of the Orderfor Enforcement of the Financial Instruments and Exchange Act (Cabinet Order No. 321
of 1965, as amended; the ("Enforcement Order")), the Tender Offer may be withdrawn.
For the purpose of the Tender Offer, "the matters equivalent to those listed in (a) through(r)" as provided in Article 14(1)(i)(s) of the Enforcement Order refer to (i) the case wherea decision-making body for the execution of business of the Target (a) has resolved to
distribute dividends of surplus with a record date preceding the commencement date ofsettlement for the Tender Offer (except where the amount of money or other properties tobe distributed to shareholders is estimated to be less than the amount equivalent to 10% of
the book value of net assets of the Target on its non-consolidated balance sheet as of theend of the most recent business year (18,158 million yen (Note))) or has resolved to submit
to the Targets shareholders meeting a proposal to make such a distribution of surplus, or(b) has resolved to distribute dividends of surplus with a record date preceding thecommencement date of settlement for the Tender Offer without showing the specificamount of dividends of surplus, leaving a possibility of making a distribution of dividends
in an amount exceeding 10% of the book value of net assets of the Target on its nonconsolidated balance sheet as of the end of the most recent business year and (ii) the casewhere a decision-making body for the execution of business of the Target has resolved toacquire treasury shares (except where the amount of money or other properties to bedelivered in exchange for the acquisition of the shares is estimated to be less than theamount equivalent to 10% of the book value of net assets of the Target on its nonconsolidated balance sheet as of the end of the most recent business year (18,158 millionyen)) or has resolved to submit to the Targets shareholders meeting a proposal for suchacquisition of treasury shares. In addition, for the purpose of the Tender Offer, "the facts
equivalent to those listed in (a) through (i)" as provided in Article 14(1)(iii)(j) of the
Enforcement Order refer to the case where any of the statutory disclosure documents filedby the Target in the past is found to contain any false statement with respect to any material
matter or omit to state any material matter required to be stated.
(Note) Assuming that there has been no change in the total number of issued shares andthe number of treasury shares, this threshold is equivalent to a dividend per shareof 467 yen (Specifically, this amount has been calculated by dividing (x) 18,158
million yen, or 10% of the net assets of 181,584 million yen (any fraction less than
1 million yen being rounded down) as of August 31, 2020 as stated in the Earnings
Briefing by (y) the number of shares (38,955,287 shares) obtained by deducting
the number of treasury shares owned by the Target as of August 31, 202013

(3,653,817 shares) from the total number of issued shares of the Target as of August
31, 2020 (42,609,104 shares), both as stated in the Earnings Briefing, with fractionsof 1 yen in the calculation result rounded up to the nearest yen.).
In addition, pursuant to Article 10, Paragraph 2 of the Antitrust Act, the Company isrequired to file a plan for the the Share Acquisition with the JFTC in advance (such fillingis hereinafter refered to as the "Prior Notification"), and may not acquire the Shares inprinciple until 30 days (or a shorter period as allowed in certain cases) have passed fromthe date of acceptance of the Prior Notification (such period during which the acquisitionof shares is prohibited is hereinafter refered to as the "Non-acquisition Period") inaccordance with Paragraph 8 of the Article.
Article 10, Paragraph 1 of the Antitrust Act prohibits the acquisition of shares in anothercompany that would substantially restrain competition in any particular field of trade, andthe JFTC may order the necessary measures to eliminate acts in violation of this provision(Article 17-2, item 1 of the Antitrust Act; the "Cease and Desist Order") or may file petition
for an emergency suspension order with the courts (Article 70-4, item 1 of the Antitrust
Act; the "Petition for an Urgent Temporary Suspension Order "). If the JFTC intends toissue the Cease and Desist Order when the Prior Notification mentioned above is made,the JFTC must hear the opinions of a person who should be addressee of the Cease andDesist Order (Article 49 of the Antitrust Act), and when hearing the opinions, the JFTC
must notify a person who should be addressee of the contents of the scheduled Cease andDesist Order (Article 50, Paragraph 1 of the Antitrust Act; the "Prior Notice of Cease andDesist Order"). A Prior Notice of Cease and Desist Order relating to share acquisition mustbe given within a certain period (in principle, within 30 days of the date of receipt of thePrior Notification, but this period may be extended or shortened; the "Period for
Measures") (Article 10, Paragraph 9 of the Antitrust Act).If the JFTC decides not to give
the Prior Notification of the Cease and Desist Order, it shall give notice to that effect (the"Notice to the Effect that Cease and Desist Order Will not be Issued") (Article 9 of Rules
on Applications for Approval, Reporting, Notification, etc. Pursuant to the Provisions ofArticles 9 to 16 of the Act on Prohibition of Private Monopolization and Maintenance ofFair Trade (The Fair Trade Commission Rule No. 1 of 1953)).
The Company made a Prior Notification regarding the Share Acquisition to the JFTC asof October 27, 2020 and the relevant Prior Notification was accepted on the same day.
Accordingly, the Non-acquisition Period and the Period for Measures will expire upon thepassage of November 26, 2020, in principle. As of today, the Company has received neither
Prior Notification of the Cease and Desist Order nor the Notice to the Effect that Cease
and Desist Order Will not be Issued from the JFTC.
With respect to the Companys Prior Notification to the JFTC pursuant to the provisionsof Article 10, Paragraph 2 of the Antitrust Act by the day before the expiration of theTender Offer Period (including extension thereof), the Company may withdraw the Tender
Offer, etc. if: (a) the Company receives from the JFTC the Prior Notice of Cease and Desist
Order ordering the disposition of all or part of the shares of the Target, the transfer of apart of its business or any other equivalent disposition; (b) the Period for Measures forwhich the Prior Notice of Cease and Desist Order should be given under the Antitrust Act
does not expire; or (c) the Company receives a Petition for an Urgent Suspension Orderfrom the court as a person engaging in an act suspected of violating the provisions ofArticle 10, Paragraph 1 of the Antitrust Act, and if it has failed to obtain the "Permission,etc." prescribed in Article 14, Paragraph 1, item 4 of the Enforcement Order. If Period for
14

Measures ends without the Prior Notice of Cease and Desist Order and the request for areport, etc. under Article 10, Paragraph 9 of the Antitrust Act from the JFTC, or if theCompany receives a Notice to the Effect that Cease and Desist Order Will not be Issued
from the JFTC, the Company shall immediately submit an amendment to the Tender Offer
Notification to the Director-General of the Kanto Local Finance Bureau in accordancewith Article 27, Paragraph 8, item 2 of the Act.
(Omitted)(After Amendment)
Upon occurrence of any of the matters as provided in Article 14(1)(i)(a) through (i) and (l)through (s), (iii)(a) through (h) and (j), and Article 14(2)(iii) through (vi) of the Order for
Enforcement of the Financial Instruments and Exchange Act (Cabinet Order No. 321 of
1965, as amended; the ("Enforcement Order")), the Tender Offer may be withdrawn.
For the purpose of the Tender Offer, "the matters equivalent to those listed in (a) through(r)" as provided in Article 14(1)(i)(s) of the Enforcement Order refer to (i) the case wherea decision-making body for the execution of business of the Target (a) has resolved to
distribute dividends of surplus with a record date preceding the commencement date ofsettlement for the Tender Offer (except where the amount of money or other properties tobe distributed to shareholders is estimated to be less than the amount equivalent to 10% of
the book value of net assets of the Target on its non-consolidated balance sheet as of theend of the most recent business year (18,158 million yen (Note))) or has resolved to submit
to the Targets shareholders meeting a proposal to make such a distribution of surplus, or(b) has resolved to distribute dividends of surplus with a record date preceding thecommencement date of settlement for the Tender Offer without showing the specificamount of dividends of surplus, leaving a possibility of making a distribution of dividends
in an amount exceeding 10% of the book value of net assets of the Target on its nonconsolidated balance sheet as of the end of the most recent business year and (ii) the casewhere a decision-making body for the execution of business of the Target has resolved toacquire treasury shares (except where the amount of money or other properties to bedelivered in exchange for the acquisition of the shares is estimated to be less than theamount equivalent to 10% of the book value of net assets of the Target on its nonconsolidated balance sheet as of the end of the most recent business year (18,158 millionyen)) or has resolved to submit to the Targets shareholders meeting a proposal for suchacquisition of treasury shares. In addition, for the purpose of the Tender Offer, "the facts
equivalent to those listed in (a) through (i)" as provided in Article 14(1)(iii)(j) of the
Enforcement Order refer to the case where any of the statutory disclosure documents filedby the Target in the past is found to contain any false statement with respect to any material
matter or omit to state any material matter required to be stated.
(Note) Assuming that there has been no change in the total number of issued shares andthe number of treasury shares, this threshold is equivalent to a dividend per shareof 467 yen (Specifically, this amount has been calculated by dividing (x) 18,158
million yen, or 10% of the net assets of 181,584 million yen (any fraction less than
1 million yen being rounded down) as of August 31, 2020 as stated in the Earnings
Briefing by (y) the number of shares (38,955,287 shares) obtained by deducting
the number of treasury shares owned by the Target as of August 31, 2020
(3,653,817 shares) from the total number of issued shares of the Target as of August
31, 2020 (42,609,104 shares), both as stated in the Earnings Briefing, with fractionsof 1 yen in the calculation result rounded up to the nearest yen.).
In addition, pursuant to Article 10, Paragraph 2 of the Antitrust Act, the Company is15required to file a plan for the the Share Acquisition with the JFTC in advance (such fillingis hereinafter refered to as the "Prior Notification"), and may not acquire the Shares inprinciple until 30 days (or a shorter period as allowed in certain cases) have passed fromthe date of acceptance of the Prior Notification (such period during which the acquisitionof shares is prohibited is hereinafter refered to as the "Non-acquisition Period") inaccordance with Paragraph 8 of the Article.
Article 10, Paragraph 1 of the Antitrust Act prohibits the acquisition of shares in anothercompany that would substantially restrain competition in any particular field of trade, andthe JFTC may order the necessary measures to eliminate acts in violation of this provision(Article 17-2, item 1 of the Antitrust Act; the "Cease and Desist Order") or may file petition
for an emergency suspension order with the courts (Article 70-4, item 1 of the Antitrust
Act; the "Petition for an Urgent Temporary Suspension Order "). If the JFTC intends toissue the Cease and Desist Order when the Prior Notification mentioned above is made,the JFTC must hear the opinions of a person who should be addressee of the Cease andDesist Order (Article 49 of the Antitrust Act), and when hearing the opinions, the JFTC
must notify a person who should be addressee of the contents of the scheduled Cease andDesist Order (Article 50, Paragraph 1 of the Antitrust Act; the "Prior Notice of Cease andDesist Order"). A Prior Notice of Cease and Desist Order relating to share acquisition mustbe given within a certain period (in principle, within 30 days of the date of receipt of thePrior Notification, but this period may be extended or shortened; the "Period for
Measures") (Article 10, Paragraph 9 of the Antitrust Act).
If the JFTC decides not to give the Prior Notification of the Cease and Desist Order, it
shall give notice to that effect (the "Notice to the Effect that Cease and Desist Order Will
not be Issued") (Article 9 of Rules on Applications for Approval, Reporting, Notification,etc. Pursuant to the Provisions of Articles 9 to 16 of the Act on Prohibition of Private
Monopolization and Maintenance of Fair Trade (The Fair Trade Commission Rule No. 1
of 1953)).
The Company made a Prior Notification regarding the Share Acquisition to the JFTC asof October 27, 2020 and the relevant Prior Notification was accepted on the same day.
Thereafter, the Company received a "Notice to the Effect that Cease and Desist Order Will
not be Issued" dated November 17, 2020 from the JFTC in relation to the Share Acquisition
on November 18, 2020, and accordingly, the Period for Measures has expired as ofNovember 17, 2020. Further, the Company received a "Notice of Shortening of Nonacquisition Period" dated November 17, 2020 from the JFTC on November 18, 2020,
which stated that it has shortened the Non-acquisition Period from thirty days to twentyone days, and accordingly, the Non-acquisition Period has expired upon the passage ofNovember 17, 2020.
(Omitted)
B. Amendments to the Tender Offer Commencement Public Notice Dated November 16,
2020
2. Detail of the Tender Offer(11) Other conditions and methods of purchase(ii) Conditions for withdrawal of the Tender Offer, detail of such conditions and method of
disclosure of withdrawal(Before Amendment)
Upon occurrence of any of the matters as provided in Article 14(1)(i)(a) through (i) and (l)16through (s), (iii)(a) through (h) and (j), (iv) and Article 14(2)(iii) through (vi) of the
Enforcement Order of the Financial Instruments and Exchange Act (Government
Ordinance No. 321 of 1965, as amended; the "Enforcement Order"), the Tender Offer may
be withdrawn.
For the purpose of the Tender Offer, "the matters equivalent to those listed in (a) through(r)" as provided in Article 14(1)(i)(s) of the Enforcement Order refer to (i) the case wherea decision-making body for the execution of business of the Target (a) has resolved to
distribute dividends of surplus with a record date preceding the commencement date ofsettlement for the Tender Offer (except where the amount of money or other properties tobe distributed to shareholders is estimated to be less than the amount equivalent to 10% of
the book value of net assets of the Target on its non-consolidated balance sheet as of theend of the most recent business year (18,158 million yen (Note))) or has resolved to submit
to the Targets shareholders meeting a proposal to make such a distribution of surplus, or(b) has resolved to distribute dividends of surplus with a record date preceding thecommencement date of settlement for the Tender Offer without showing the specificamount of dividends of surplus, leaving a possibility of making a distribution of dividends
in an amount exceeding 10% of the book value of net assets of the Target on its nonconsolidated balance sheet as of the end of the most recent business year and (ii) the casewhere a decision-making body for the execution of business of the Target has resolved toacquire treasury shares (except where the amount of money or other properties to bedelivered in exchange for the acquisition of the shares is estimated to be less than theamount equivalent to 10% of the book value of net assets of the Target on its nonconsolidated balance sheet as of the end of the most recent business year (18,158 millionyen)) or has resolved to submit to the Targets shareholde rs meeting a proposal for suchacquisition of treasury shares. In addition, for the purpose of the Tender Offer, "the facts
equivalent to those listed in (a) through (i)" as provided in Article 14(1)(iii)(j) of the
Enforcement Order refer to the case where any of the statutory disclosure documents filedby the Target in the past is found to contain any false statement with respect to any material
matter or omit to state any material matter required to be stated.
With respect to the Tender Offerors Prior N otification to the JFTC pursuant to theprovisions of Article 10, Paragraph 2 of the Act on Prohibition of Private Monopolizationand Maintenance of Fair Trade (Act No. 54 of 1947, as amended; the "Antitrust Act") by
the day before the expiration of the Tender Offer Period (including extension thereof),
Tender Offeror may withdraw the Tender Offer, etc. if: (a) the Company receives from the
JFTC the Prior Notice of Cease and Desist Order ordering the disposition of all or part ofthe shares of the Target, the transfer of a part of its business or any other equivalentdisposition; (b) the Period for Measures for which the Prior Notice of Cease and Desist
Order should be given under the Antitrust Act does not expire; or (c) the Tender Offeror
receives a Petition for an Urgent Suspension Order from the court as a person engaging inan act suspected of violating the provisions of Article 10, Paragraph 1 of the Antitrust Act,and if it has failed to obtain the "Permission, etc." prescribed in Article 14, Paragraph 1,
item 4 of the Enforcement Order. If Period for Measures ends without the Prior Notice ofCease and Desist Order and the request for a report, etc. under Article 10, Paragraph 9 of
the Antitrust Act from the JFTC, or if the Tender Offeror receives a Notice to the Effectthat Cease and Desist Order Will not be Issued from the JFTC, the Tender Offeror shallimmediately submit an amendment to the Statement to the Director-General of the Kanto
Local Finance Bureau in accordance with Article 27, Paragraph 8, item 2 of the Act.
If the Tender Offeror intends to withdraw the Tender Offer, it will issue an electronic public
17

notice and publish the notice in the Nihon Keizai Shimbun. However, if it is difficult togive public notice by the last day of the Tender Offer Period, the Tender Offeror shall give
public notice by the method prescribed in Article 20 of the Cabinet Office Ordinance on
Disclosure Required for Tender Offer for Share Certificates, etc. by Person Other thanIssuer (Ordinance of the Ministry of Finance No. 38 of 1990, as amended; the "Cabinet
Ordinance") and give public notice immediately thereafter.
(Note) Assuming that there has been no change in the total number of issued shares and thenumber of treasury shares, this threshold is equivalent to a dividend per share of 467
yen (Specifically, this amount has been calculated by dividing (x) 18,158 million yen,or 10% of the net assets of 181,584 million yen (any fraction less than 1 million yen
being rounded down) as of August 31, 2020 as stated in the Earnings Briefing by (y)the number of shares (38,955,287 shares) obtained by deducting the number oftreasury shares owned by the Target as of August 31, 2020 (3,653,817 shares) fromthe total number of issued shares of the Target as of August 31, 2020 (42,609,104
shares), both as stated in the Earnings Briefing, with fractions of 1 yen in thecalculation result rounded up to the nearest yen.).
(After Amendment)
Upon occurrence of any of the matters as provided in Article 14(1)(i)(a) through (i) and (l)through (s), (iii)(a) through (h) and (j), and Article 14(2)(iii) through (vi) of the
Enforcement Order of the Financial Instruments and Exchange Act (Government
Ordinance No. 321 of 1965, as amended; the "Enforcement Order"), the Tender Offer may
be withdrawn.
For the purpose of the Tender Offer, "the matters equivalent to those listed in (a) through(r)" as provided in Article 14(1)(i)(s) of the Enforcement Order refer to (i) the case wherea decision-making body for the execution of business of the Target (a) has resolved to
distribute dividends of surplus with a record date preceding the commencement date ofsettlement for the Tender Offer (except where the amount of money or other properties tobe distributed to shareholders is estimated to be less than the amount equivalent to 10% of
the book value of net assets of the Target on its non-consolidated balance sheet as of theend of the most recent business year (18,158 million yen (Note))) or has resolved to submit
to the Targets shareholders meeting a proposal to make such a distribution of surplus, or(b) has resolved to distribute dividends of surplus with a record date preceding thecommencement date of settlement for the Tender Offer without showing the specificamount of dividends of surplus, leaving a possibility of making a distribution of dividends
in an amount exceeding 10% of the book value of net assets of the Target on its nonconsolidated balance sheet as of the end of the most recent business year and (ii) the casewhere a decision-making body for the execution of business of the Target has resolved toacquire treasury shares (except where the amount of money or other properties to bedelivered in exchange for the acquisition of the shares is estimated to be less than theamount equivalent to 10% of the book value of net assets of the Target on its nonconsolidated balance sheet as of the end of the most recent business year (18,158 millionyen)) or has resolved to submit to the Targets shareholders meeting a proposal for suchacquisition of treasury shares. In addition, for the purpose of the Tender Offer, "the facts
equivalent to those listed in (a) through (i)" as provided in Article 14(1)(iii)(j) of the
Enforcement Order refer to the case where any of the statutory disclosure documents filedby the Target in the past is found to contain any false statement with respect to any material
matter or omit to state any material matter required to be stated.
If the Tender Offeror intends to withdraw the Tender Offer, it will issue an electronic public
18

notice and publish the notice in the Nihon Keizai Shimbun. However, if it is difficult togive public notice by the last day of the Tender Offer Period, the Tender Offeror shall give
public notice by the method prescribed in Article 20 of the Cabinet Office Ordinance on
Disclosure Required for Tender Offer for Share Certificates, etc. by Person Other thanIssuer (Ordinance of the Ministry of Finance No. 38 of 1990, as amended; the "Cabinet
Ordinance") and give public notice immediately thereafter.
(Note) Assuming that there has been no change in the total number of issued shares and thenumber of treasury shares, this threshold is equivalent to a dividend per share of 467
yen (Specifically, this amount has been calculated by dividing (x) 18,158 million yen,or 10% of the net assets of 181,584 million yen (any fraction less than 1 million yen
being rounded down) as of August 31, 2020 as stated in the Earnings Briefing by (y)the number of shares (38,955,287 shares) obtained by deducting the number oftreasury shares owned by the Target as of August 31, 2020 (3,653,817 shares) fromthe total number of issued shares of the Target as of August 31, 2020 (42,609,104
shares), both as stated in the Earnings Briefing, with fractions of 1 yen in thecalculation result rounded up to the nearest yen.).
End

19



This press release is intended to announce the Tender Offer to the public and has not been prepared forthe purpose of soliciting an offer to sell shares. If shareholders wish to make an offer to sell their shares,
they should first read the Tender Offer Explanation Statement concerning the Tender Offer and make anoffer to sell their shares at their own discretion. This press release shall neither be, nor constitute a partof, an offer to sell or purchase, or solicitation to sell or purchase, any securities, and neither this press
release (or a part of this press release) nor its distribution shall be interpreted to constitute the basis of
any agreement in relation to the Tender Offer, and this press release may not be relied upon at the timeof entering into any such agreement.



The Tender Offer shall be implemented in compliance with the procedures and information disclosure
standards provided by the Financial Instruments and Exchange Act of Japan, which procedures andstandards are not necessarily identical to the procedures and information disclosure standards applied in
the United States. Specifically, Section 13(e) and Section 14(d) of the Securities Exchange Act of 1934
(as amended; “Securities Exchange Act”) and the rules promulgated under such Section do not apply to
the Tender Offer, and the Tender Offer is not in compliance with the procedures and standards
thereunder. It is not necessarily the case that all financial information in this press release is equivalent
to financial statements of companies in the United States. It may be difficult to enforce any right or
claim arising under U.S. federal securities laws because the Tender Offeror and the Target areincorporated outside the United States and all of their directors are non-U.S. residents. Shareholders
may not be able to sue a company outside the United States and its directors in a non-U.S. court forviolations of the U.S. securities laws. Furthermore, there is no guarantee that shareholders will be able
to compel a company outside the United States or its subsidiaries and affiliates to subject themselves tothe jurisdiction of a U.S. court.



The financial advisor of the Tender Offeror or the Target and their respective affiliates may, within theirordinary course of business, purchase, or conduct any act toward the purchase of, the shares of the Target
for their own account or for their customers’ accounts outside the Tender Offer prior to thecommencement of, or during, the period of the Tender Offer, etc. in accordance with the requirementsof Rule 14e-5(b) under the Securities Exchange Act to the extent permissible under the Financial
Instruments and Exchange Act and other applicable laws and regulations in Japan. If any information
concerning such purchase is disclosed in Japan, the disclosure of such information will be made in the
United States in a similar manner.



All the procedures in connection with the Tender Offer shall be taken in the Japanese language, unlessotherwise stipulated. While a part or all of the documents in connection with the Tender Offer may be
prepared in English, the Japanese documents shall prevail in case of any discrepancies between Japanese
documents and corresponding English documents.

This press release contains “forward-looking statements” as defined in Section 27A of the Securities
Act of 1933 (as amended) and Section 21E of the Securities Exchange Act. The actual results may besignificantly different from the projections implied or expressly stated as “forward-looking statements”
due to known or unknown risks, uncertainties or other factors. None of the Tender Offeror, the Target
or any of their respective affiliates assures that such express or implied projections set forth herein as“forward-looking statements” will eventually prove to be correct. “Forward-looking statements”
contained herein were prepared based on the information available to the Tender Offeror as of the dateof this press release and, unless required by laws and regulations, none of the Tender Offeror, the Target
or any of their respective affiliates shall have the obligation to update or correct the statements madeherein in order to reflect the future events or circumstances.



Some countries or regions may impose restrictions on the announcement, issue or distribution of this20press release. In such cases, please take note of such restrictions and comply with them. In countries orregions where the implementation of the Tender Offer is illegal, even upon receiving this press release,such receipt shall not constitute a solicitation of an offer to sell or an offer to buy shares relating to theTender Offer and shall be deemed a distribution of materials for informative purposes only.

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