October 11, 2018

To whom it may concern
Company name:

Don Quijote Holdings Co., Ltd.

Representative:

Koji Ohara, President and CEO

Security Code:7532 First Section, Tokyo Stock Exchange

Address:

2-19-10 Aobadai, Meguro-ku, Tokyo

Information disclosure:

Mitsuo Takahashi, Senior Managing Director and CFO

Phone:+81-3-5725-7588

Announcement of Acquisition of Shares of UNY CO., LTD. (Changes in theSubsidiary, etc.) and Expression of Opinion regarding Planned Commencement of
Tender Offer for Shares in Don Quijote Holdings Co., Ltd. by a Wholly-Owned
Subsidiary of FamilyMart UNY Holdings, Co., Ltd.
Don Quijote Holdings Co., Ltd. (the “Company”) resolved at the Board of Directors’ meeting held today
to acquire 60% of the shares of UNY CO., LTD. (“UNY”) from FamilyMart UNY Holdings Co., Ltd.
(“FamilyMart UNY HD”) and convert UNY into a wholly-owned subsidiary of the Company (the “Share
Acquisition”) as described in “I. Acquisition of Shares of UNY Accompanied by Changes in Subsidiaries,
etc. (Conversion into Subsidiary and Conversion into Sub-subsidiary)” below, and, in regard to a tender
offer (the “Tender Offer”) for the common shares of the Company (the “Company’s Shares”) through awholly-owned subsidiary (the “Tender Offeror”) of FamilyMart UNY HD that will be implemented for the
purpose of making the Company into an equity method affiliate of FamilyMart UNY HD as described in“II. Expression of Opinion on the Tender Offer” below, to agree to the Tender Offer if the Tender Offer isstarted, and leave the decision on whether to respond to the Tender Offer up to shareholders because theCompany’s Shares will remain listed even after the Tender Offer as the opinion of the Company as of today,
as described below.
The Share Acquisition and the Tender Offer are independent transactions, and one transaction is not a
precondition for the other transaction. Therefore, even if one transaction is not completed as planned,
whether in full or in part, the other transaction may be conducted.
If the Share Acquisition is conducted, UNY will become a wholly-owned subsidiary of the Company, andUCS CO., LTD. (“UCS”), which is a wholly-owned subsidiary of UNY, will also become a wholly-owned
subsidiary (sub-subsidiary) of the Company.
In addition, according to the “Announcement of Planned Commencement of Tender Offer for Shares in
Don Quijote Holdings Co., Ltd. (Code No. 7532) and Transfer of Shares Accompanied by Changes to
Subsidiary” released today by FamilyMart UNY HD (“FamilyMart UNY HD Press Release”), the details

1

of the Tender Offeror have yet to be decided on at this time. In addition, according to the FamilyMart UNY
HD Press Release, the Tender Offer will be conducted promptly if certain conditions are fulfilled such as(1) the Company’s Board of Directors has resolved to express an opinion that it supports the Tender Offer,and has not resolved to withdraw that resolution or made any resolution that contradicts that resolution(note). As of today, FamilyMart UNY HD aims to have the Tender Offeror start the Tender Offer in earlyNovember 2018. Because a portion of the details of the Tender Offer have not been decided on in thismanner as of today, the Company’s Board of Directors will make another resolution on the expression ofan opinion regarding the Tender Offer when the Tender Offer is started. Further, while the screening
procedures under the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No.
54 of 1947, as amended; the “Antimonopoly Act”) on the Tender Offeror have not been completed as oftoday, they are expected to be completed before the start of the Tender Offer, or at the latest, without delay
after the start of the Tender Offer. If there are any changes in such expectations, there could be a delay inthe starting timing of the Tender Offer or an extension in the offer period for the Tender Offer (“Tender
Offer Period”).
Because there will be an upper limit on the number of shares to be purchased under this Tender Offer andthe Company and FamilyMart UNY HD have confirmed that the Company’s Shares will remain listed evenafter the Tender Offer is made, the Company’s Shares will remain listed on the First Section of the Tokyo
Stock Exchange even after the Tender Offer.
(Note) The preconditions for the implementation of the Tender Offer are: (1) mentioned above; (2) there
are no petitions, lawsuits, or proceedings with judicial or administrative institutions, etc. calling
for the start of the Tender Offer to be prohibited or limited or judgments, etc. by judicial oradministrative institutions, etc. prohibiting or limiting the start of the Tender Offer; (3) there areno material facts regarding the Company (refers to material facts prescribed in Article 166,
paragraph 2 of the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended; the“Act”) or facts on the Tender Offer (refers to facts prescribed in Article 167, paragraph 2 of theAct) that are not disclosed; and (4) there are no grounds that could have a significant adverse effecton the business, financial position, management, cash flows, or outlook for these items of theCompany or its subsidiaries and affiliates, and there have been no significant changes in the stock
market conditions or other market environments, financial environments, or economic
environments in Japan or overseas.
The Company resolved at the Board of Directors’ meeting held today to change its trade name to “Pan
Pacific International Holdings Corporation.” For details of partial amendments to the Articles ofIncorporation in connection with the change of trade name, please refer to the Company’s announcement“Announcement Regarding Partial Amendments to the Articles of Incorporation to Change Trade Name,
and Change in Officers” released today.
I. Acquisition of Shares of UNY Accompanied by Changes in Subsidiaries, etc. (Conversion into
Subsidiary and Conversion into Sub-subsidiary)

2The Company owns 40% of the shares of UNY as of today, and it was decided through a resolution of
the Board of Directors’ meeting held today to acquire 60% of the shares of UNY from FamilyMart UNY
HD and convert UNY into a wholly-owned subsidiary, as described below. UNY will consequently becomea specified subsidiary of the Company. In addition, with the conversion of UNY into a wholly-owned
subsidiary, UNY’s wholly-owned subsidiary, UCS will also become a wholly-owned subsidiary (subsubsidiary).
1. Reason for the Share Acquisition
The Company reached the agreement with FamilyMart UNY HD that cooperation and mutual
complementary effects could be expected by leveraging the respective management resources and uniquestrengths and know-how of both companies beyond group boundaries as there is little competition because
the core businesses of each corporate group differ, that further refining UNY’s strengths up until now in
the food business, etc. in order to strongly grow the general merchandise store business (“GMS Business”)
while leveraging what FamilyMart UNY HD considers are the Company’s strengths, such as support froma wide range of customers including young people, the development of consumable-time stores withstrong amusement qualities (stores where consumers enjoy their time as they would at an amusement
facility while also doing their shopping), and know-how for supporting the night market and inboundmarket, would contribute to improvements in medium to long-term corporate value for UNY, and thatincorporating UNY in the Group that has a major presence in the Chukyo area, which the Company
considers a potential future major commercial area, and a member base of 5 million people mainly
consisting of families would contribute to an improvement in the Company’s corporate value. Accordingly,
the Company decided to conduct a close alliance including capital, and not only cooperation through abusiness alliance, and on August 31, 2017, concluded a business alliance agreement with FamilyMart
UNY HD (“2017 Business Alliance Agreement”).
After the 2017 Business Alliance Agreement was entered, the Company and UNY worked to develop
double-name stores for six existing Apita and Piago stores. In February and March 2018, UNY’s strengths
up until now in the food business and the Company’s know-how of stores for consumable-time store
format with strong amusement qualities were combined in these six stores, which were converted into a
new store format as MEGA Don Quijote UNY, and newly opened. The Company believes thatconsiderable growth has been achieved with these six stores because during the period of six months fromMarch to August 2018 following this conversion, cumulative net sales increased about 90% year on year
from 6.8 billion yen to 13.2 billion yen and the cumulative average number of customers per day for thesix stores increased about 60% year on year from around 20,000 people to around 32,000 people.
The results achieved with these double-name stores have led to high hopes for further strengthened
alliance with UNY using this new store format as a model case. Seeing the steady growth of UNY storesthat had been converted into a new store format for six months before approximately one year has elapsed
since the business alliance between the Company and FamilyMart UNY HD had begun, the Company
and FamilyMart UNY HD began discussions once again on the approach towards a capital relationshipwith UNY in late August 2018. As a result of the continued discussions, it was deemed that the corporate

3

value of UNY could be further improved through an even deeper alliance with the Company in order toachieve further store operations improvements, improvements in the efficiency of commercial distribution,and the implementation of measures to promptly respond to diversifying customer needs. Meanwhile, theCompany also concluded that it would be possible to enhance competitiveness and further improve thecorporate value of the Company through a combined efforts with UNY in accelerating the creation of new
bricks-and-mortar stores with strong amusement qualities by leveraging the solid trust UNY has built over
the years with its customers mainly in the Chukyo area. Consequently, the Company today decided topurchase all of the shares of UNY held by FamilyMart UNY HD.
For the funds required for the Share Acquisition, the Company will use hybrid financing as well as cash
reserves and borrowing from financial institutions while taking into consideration the avoidance of adecline in capital efficiency from share dilution and the maintenance and improvement of financial
soundness, and has no plans of procuring funds through the issuance of new shares.
While hybrid financing is a liability, it will not result in the dilution of shares, since it is a form offinancing that has aspects and characteristics similar to capital including optional deferral of interest
payments, an especially long repayment period, and treatment that is subordinated with respect toliquidation proceedings and bankruptcy proceedings, the Company expects to obtain certification as funds
to be handled like capital for a certain percentage of the funds procured through hybrid financing from arating agency (i.e., Japan Credit Rating Agency, Ltd.).
2. Outline of the Subsidiaries, etc. to be Acquired
1) UNY CO., LTD.
(1) Name(2) Location(3) Name and Title ofRepresentative(4) Description of Business(5) Capital(6) Date of Establishment(7) Major Shareholders andOwnership Percentages

UNY CO., LTD.
1 Amaikegotanda-cho, Inazawa-shi, Aichi
Norio Sako, Representative Director and President
General retail chain store operator covering clothing, food, housing,and leisure¥10,000 million (non-consolidated) (As of February 20, 2018)
February 16, 2012
FamilyMart UNY Holdings Co., Ltd.
60.0%
The Company

40.0%

Capital RelationshipAs shown above.
Three Directors, two Executive Officers and(8) Relationship between the
Company and UNY CO.,LTD.

one employee of the Company serve
concurrently as directors of UNY CO.,Personnel
RelationshipLTD., and two Directors of the Company
serve concurrently as Corporate Auditors of
UNY CO., LTD.

4

The Company and UNY have entered into amanagement instruction agreement and theCompany engages in the lending of funds toBusiness
Relationship

UNY. Additionally, the Company’s
subsidiary has entered into an agreementwith UNY’s subsidiary to supply products tobe sold at stores operated by the said
subsidiary.

(9) Operating Results and Financial Condition for the Last Three Years of UNY CO., LTD. (Nonconsolidated)
Fiscal year ended
Fiscal year ended
Fiscal year ended
Accounting Period
February 29, 2016
February 28, 2017
February 28, 2018
Net assets¥163,177 million¥108,785 million¥90,040 million
Total assets¥560,255 million¥505,797 million¥438,389 million¥815,885.71¥543,929.31¥450,204.06

Net sales¥716,994 million¥699,822 million¥670,649 million

Operating profit¥10,623 million¥13,866 million¥17,977 million

Ordinary profit¥10,939 million¥13,925 million¥16,963 million¥2,541 million¥(56,599) million¥9,265 million¥12,707.60¥(282,996.50)¥46,329.98――¥3,387.94

Net assets per share

Profit attributable to ownersof parent
Profit per share
Dividend per share(Note) UNY does not prepare consolidated financial statements. Furthermore, while UNY has several
subsidiaries in addition to UCS, it has considerable business transactions with each of its
subsidiaries including UCS. Accordingly, the consolidated operating results and consolidated
financial position of UNY differ substantially from the simple aggregation of the financial figuresof UNY and each of its subsidiaries. Consequently, only the non-consolidated operating results andfinancial position of UNY are stated.
2) UCS CO., LTD. (Sub-subsidiary)(1) Name(2) Location(3) Name and Title ofRepresentative(4) Description of Business(5) Capital(6) Date of Establishment(7) Major Shareholders andOwnership Percentages(8) Relationship between the

UCS CO., LTD.
1 Amaikegotanda-cho, Inazawa-shi, Aichi
Hideki Goto, Representative Director and President
Credit card, insurance and leasing business¥1,610 million (non-consolidated) (As of February 20, 2018)
May 17, 1991
UNY CO., LTD.
Capital Relationship5

100.0%
There are no capital relationships between

Company and UCS CO.,LTD.

the two companies.
There are no personnel relationships

Personnel
Relationshipbetween the two companies.
The Company provides guarantees to thedebt obligations of UCS to FamilyMart

Business
Relationship

UNY Holdings Co., Ltd. Additionally, theCompany and UCS have entered into credit
card merchant agreement regarding thecredit card issued by UCS.

(9) Operating Results and Financial Condition for the Last Three Years of UCS CO., LTD. (Nonconsolidated)
Fiscal year ended
Fiscal year ended
Fiscal year ended
Accounting Period
February 29, 2016
February 28, 2017
February 28, 2018
Net assets¥24,665 million¥24,216 million¥26,346 million
Total assets¥144,611 million¥150,442 million¥148,843 million¥1,311.47¥1,287.61¥1,400.83

Net sales¥19,500 million¥19,997 million¥20,103 million

Operating profit¥3,837 million¥301 million¥3,381 million

Ordinary profit¥3,840 million¥304 million¥3,835 million¥2,333 million¥19 million¥2,599 million¥124.07¥1.03¥138.24

¥25

¥25

―

Net assets per share

Profit attributable to ownersof parent
Profit per share
Dividend per share

3. Outline of the Party from Which the Company Will Acquire Stocks(1) Name(2) Location(3) Name and Title ofRepresentative(4) Description of Business(5) Capital(6) Date of Establishment(7) Total equity(8) Total assets(9) Major Shareholders andOwnership Percentages(As of August 31, 2018)

FamilyMart UNY Holdings Co., Ltd.
3-1-1 Higashi-Ikebukuro, Toshima-ku, Tokyo
Koji Takayanagi, Representative Director and President
A holding company for operators of general merchandise stores andconvenience stores, etc.
¥16,659 million (As of February 28, 2018)
September 1, 1981
¥589,377 million (as of February 28, 2018)¥1,732,506 million (as of February 28, 2018)
ITOCHU Corporation
41.43%The Master Trust Bank of Japan, Ltd. (Trust account)

9.89%

ITOCHU RETAIL INVESTMENT, LLC

8.58%

Japan Trustee Services Bank, Ltd. (Trust account）

5.30%

Trust & Custody Services Bank, Ltd. (Securities

2.07%

6

Investment Trust Account)
NTT DOCOMO, INC.

1.43%

Nippon Life Insurance Company

1.22%

STATE STREET BANK WEST CLIENT - TREATY
505234
BNP Paribas Securities (Japan) Limited

1.12%
1.11%

Japan Trustee Services Bank, Ltd. (Trust account 5)

0.96%

Capital Relationship(10) Relationship between the
Company and FamilyMart
UNY Holdings Co., Ltd.

There are no capital relationships between
the two companies.

Personnel
Relationship

There are no personnel relationships

Business
Relationship

There are no business relationships between

Status as Related
Parties

between the two companies.
the two companies.
Not applicable.

4. Number of Acquired Shares, Acquisition Cost and Shares Held Before and After Acquisition(1) Number of shares owned
before change(2) Number of acquired
shares(3) Acquisition cost(4) Number of shares owned
after change

Common shares of UNY: 80,000 shares(Ownership ratio of voting rights: 40.0%)
Common shares of UNY: 120,000 shares(Ownership ratio of voting rights: 60.0%)
Common shares of UNY: ¥28,200 million
Common shares of UNY: 200,000 shares(Ownership ratio of voting rights: 100.0%)

5. Schedule
Date of resolution of theBoard of Directors(The Company andFamilyMart UNY Holdings
Co., Ltd.)
Date of conclusion of sharetransfer agreement
Date of execution of sharetransfer

October 11, 2018

October 11, 2018
January 2019 (Planned)(Note) Conditional on that the waiting period and the approval screening period under the Antimonopoly
Act have passed.
6. Outlook

7

If the Share Acquisition is conducted, UNY and UCS will become wholly-owned subsidiaries of theCompany. In such a case, a revision to the consolidated business forecast for the fiscal year ending June30, 2019, released on August 10, 2018, will be necessary, due to the impact from the change in UNY andits subsidiaries including UCS, which are equity method affiliates in which the Company has a 40% stake,to consolidated subsidiaries, among other factors. Such impact is currently being examined, and anannouncement will be made once the detailed amount is determined.
II. Expression of Opinion on the Tender Offer
Regarding the tender offer on the common shares of the Company by the Tender Offeror, the Company
resolved at the Board of Directors’ meeting held today to agree to the Tender Offer if the Tender Offer isstarted as the opinion of the Company as of today, and to leave the decision on whether to respond to theTender Offer up to shareholders because the Company’s Shares will remain listed even after the Tender
Offer.
1. Overview of the Tender Offeror
According to FamilyMart UNY HD, although the Tender Offeror will be a wholly-owned subsidiary of
FamilyMart UNY HD, because the details have not been decided on yet, details will be provided once
they are determined. For an overview of FamilyMart UNY HD that decided to acquire Company’s Sharesby way of the Tender Offer through the Tender Offeror, refer to “3. Outline of the Party from Which theCompany Will Acquire Stocks” of “I. Acquisition of Shares of UNY Accompanied by Changes in
Subsidiaries, etc. (Conversion into Subsidiary and Conversion into Sub-subsidiary)”.
2. Offer Price
6,600 yen per common share (“Tender Offer Price”)
3. Details, Basis, and Reason for Opinion on the Tender Offer(1) Details of opinion on the Tender OfferAt the Board of Directors’ meeting held today, the Company resolved to agree to the Tender Offer if theTender Offer is started as the opinion of the Company as of today based on the basis and reason describedin “(2) Basis and Reason for Opinion on the Tender Offer” below. In addition, it was resolved at thisBoard of Directors’ meeting to leave the decision on whether to respond to the Tender Offer up toshareholders because the Company’s Shares will remain listed even after the Tender Offer.
(2) Basis and Reason for Opinion on the Tender Offer
The descriptions on FamilyMart UNY HD in the basis and reason for opinion on the Tender Offer are8

based on explanations received from FamilyMart UNY HD.
1) Overview of the Tender Offer
FamilyMart UNY HD resolved at its Board of Directors’ meeting held today to, for the purpose of
converting the Company into an equity method affiliate of FamilyMart UNY HD (the “Transaction”),
have the Tender Offeror conduct the Tender Offer for the Company’s Shares with a schedule so that
the Tender Offer Period would be between 20 to 30 business days under the precondition for the startof the Tender Offer that certain conditions are fulfilled, such as that the Company’s Board of Directors
has resolved to express an opinion that it supports the Tender Offer, and has not resolved to withdraw
that resolution or made any resolution that contradicts that resolution.
As of today, the Company’s Shares are listed on the First Section of the Tokyo Stock Exchange, andbecause FamilyMart UNY HD will conduct the Tender Offer for the purpose of converting theCompany into an equity method affiliate and the Company and FamilyMart UNY HD have a policyof maintaining the listing of the Company’s Shares even after the Tender Offer is made, there will bean upper limit on the number of shares to be purchased in the Tender Offer of 32,108,700 shares (Note1) (ownership ratio (Note 2): 20.17% (rounded off to 2 decimal places; same applies for all percentage
calculations below). This upper limit on the number of shares to be purchased is the minimum numberof shares required for FamilyMart UNY HD to stably convert the Company into an equity method
affiliate, and was calculated while taking into consideration the issuance of subscription rights in the
future in light of the number of subscription rights issued by the Company and the amount ofsubscription rights issued over the past three years. If the Tender Offeror were to acquire 32,108,700
shares of the Company’s Shares by way of the Tender Offer, FamilyMart UNY HD would own 20%
or more of the total shareholder voting rights of the Company (Note 3) through the Tender Offeror.
If the total number of share certificates, etc. offered for sale in response to the Tender Offer (“Share
Certificates, etc. Offered for Sale”) exceeds the upper limit on the number of shares to be purchased(scheduled to be 32,108,700 shares), the excess share certificates, etc. shall not be purchased, whether
in full or in part, but transferred or otherwise settled in respect of a tender offer of share certificates,etc. using the method of proportional distribution as prescribed in Article 27-13, paragraph 5 of the
Act and Article 32 of the Cabinet Office Ordinance on Disclosure Required for Tender Offer for Share
Certificates, etc. by Person Other than Issuer (Ordinance of the Ministry of Finance No. 38 of 1990,
as amended). Meanwhile, there is no lower limit on the number of shares to be purchased in the Tender
Offer, and if the total number of Share Certificates, etc. Offered for Sale is less than the upper limiton the number of shares to be purchased (scheduled to be 32,108,700 shares), all Share Certificates,etc. Offered for Sale shall be purchased.
(Note 1) The upper limit on the number of shares to be purchased in the Tender Offer (scheduled to
be 32,108,700 shares) is equivalent to 20.00% (20.30% of the total number of shareholder
voting rights of the Company) of the number of shares (160,561,427 shares) calculated
by adding to the total number of issued shares as of June 30, 2018 (158,193,160 shares)
stated in the securities report for the 38th fiscal period submitted by the Company on
September 26, 2018 (the “Securities Report of the Company”) the number of the9Company’s Shares (979,200 shares) to be issued upon exercise of the subscription rights(9,779 units) excluding a decrease (a total of 12 units) due to the exercise of subscription
rights (3 units) and the termination of subscription rights (9 units) reported by theCompany as a fluctuation from July 1, 2018 to October 10, 2018 from the number ofsubscription rights (9,791 units) as of June 30, 2018, the number of shares (300 shares)
granted for the subscription rights (3 units) exercised as described above, and a certain
number of shares (1,393,400 shares) taking into consideration the issuance of subscription
rights in the future, and then deducting the number of treasury shares (4,633 shares) heldby the Company as of that date. However, the final upper limit on the number of shares
to be purchased will be decided in consideration of the number of treasury shares held by
the Company according to the most recent information available as of the start of theTender Offer before the Tender Offer starts.
(Note 2) The ownership ratio refers to the ratio compared to the number of shares (159,168,027
shares) calculated by adding to the total number of issued shares as of June 30, 2018
(158,193,160 shares) stated in the Securities Report of the Company, the number of theCompany’s Shares (979,200 shares) to be issued upon exercise of the subscription rights(9,779 units) excluding a decrease (a total of 12 units) due to the exercise of subscription
rights (3 units) and the termination of subscription rights (9 units) reported by theCompany as a fluctuation from July 1, 2018 to October 10, 2018 from the number ofsubscription rights (9,791 units) as of June 30, 2018, and the number of shares (300
shares) granted for the subscription rights (3 units) exercised as described above, and thendeducting the number of treasury shares (4,633 shares) held by the Company as of that
date.
(Note 3) Refers to the total number of shareholder voting rights as of June 30, 2018 stated in the
Securities Report of the Company.
2) Purpose and Background of the Tender Offer
FamilyMart Co., Ltd. (“Former FamilyMart”), which is the predecessor of FamilyMart UNY HD
that is the wholly-owning parent of the Tender Offeror, listed its shares on the Tokyo Stock Exchange
in December 1987. In September 2016, Former FamilyMart conducted a business integration throughan absorption-type merger with UNY Group Holdings Co., Ltd. (listed on the first section of the Tokyo
Stock Exchange and the Nagoya Stock Exchange at that time) with the Former FamilyMart being thesurviving company, and made a transition to a pure holding company structure, subsequently changing
the trade name to FamilyMart UNY HD. According to the FamilyMart UNY HD Press Release,
FamilyMart UNY HD is a corporate group consisting of FamilyMart UNY HD, 35 subsidiaries, and25 affiliates and joint ventures, for a total of 61 companies (as of August 31, 2018). It is engaged in aconvenience store business (“CVS Business”) centered around FamilyMart Co., Ltd. (“FamilyMart”)
and a GMS Business and peripheral businesses centered around UNY.
The CVS Business has a network of approximately 17,000 stores in Japan. The conversion of Circle
K Sunkus brand stores into FamilyMart brand stores is underway, and scheduled to be completed in10

November of this year. In addition, the three major reforms, namely structural reform in ready-to-eat
items, marketing reform, and operations reform, will be pursued in an aim to achieve further synergies.
In the GMS Business, retail stores are operated and managed in response to the needs of customers
in each region, including the general merchandise store business Apita and the supermarket business
Piago, in an aim to make the lives of customers more abundant.
Meanwhile, the Company listed its shares on the Tokyo Stock Exchange in June 1998. Although theCompany was established as Just Co., Ltd. in September 1980 for the purpose of wholesale and retailsales of daily necessities, etc., in March 1989 it opened the first Don Quijote store in Fuchu City,
Tokyo in order to sell quality products to consumers at a cheaper price and changed its main businessformat from wholesale to retail. Since the Company changed its trade name to Don Quijote Co., Ltd.
in September 1995, it has opened 379 stores in Japan, 37 stores in the U.S., and 2 stores in Singapore(as of June 30, 2018) with a focus on discount stores centered around the Don Quijote brand. The
Company moved to a pure holding company structure through a company split and changed its tradename to Don Quijote Holdings Co., Ltd. in December 2013. The Company is a corporate groupcurrently consisting of 52 consolidated subsidiaries, 18 non-consolidated subsidiaries, 2 equity
method affiliates, and 3 non-equity method affiliates (as of June 30, 2018), and is engaged in the retailbusiness with the management and operation of discount stores such as Don Quijote, Picasso, and
MEGA Don Quijote as the core business and the tenant leasing business in which parts of stores areleased to tenants.
The management environment for the retail industry in Japan continues to be challenging as a resultof factors including the shrinking market due to a decline in the total population, intensifying interindustry competitive environment, including expanding e-commerce, continued inclinations ofconsumers towards low prices, and human resource shortages at stores and in the logistics sector. In
addition, the needs of consumers are becoming increasingly diverse and consumers are rapidly
becoming more selective. Within this environment, in the future of the retail industry, it will benecessary to create attractive stores and diversify sales channels, develop and offer better products,
and adopt more competitive pricing in response to the changing needs of consumers, and it is also
necessary to pursue more efficient management including improvements in the efficiency of store
operations and the streamlining of commercial distribution.
FamilyMart UNY HD and the Company started considering a business alliance between the twocompanies on June 13, 2017 based on the belief that, in the retail businesses conducted by bothcompanies within this difficult operations environment, cooperation and mutual complementary
effects could be expected by leveraging the respective management resources and unique strengths
and know-how of both companies beyond group boundaries as there is little competition because thecore businesses of each corporate group differ. Subsequently, on August 24, 2017, FamilyMart UNY
HD and the Company signed a basic agreement as a result of discussions on the details of the allianceincluding cooperation in the retail business, the joint development and purchase of products,
streamlining of the logistics function, and cooperation in overseas markets and in the development of11new business formats. The Company and FamilyMart UNY HD then reached the agreement inaddition to the conducting a business alliance, that further refining UNY’s strengths up until now in
the food business, etc. in order to strongly grow the GMS Business while leveraging what FamilyMart
UNY HD considers are the Company’s strengths, such as support from a wide range of customers
including young people, the development of consumable-time store format with strong amusement
qualities, and know-how for supporting the night market and inbound market, would contribute toimprovements in medium- to long-term corporate value for UNY, and that incorporating UNY thathas a major presence in the Chukyo area, which the Company considers a potential future majorcommercial area, and a member base of 5 million people mainly consisting of families would
contribute to an improvement in the Company’s corporate value. Accordingly, the Company decided
to conduct a close alliance including capital, and not only cooperation through a business alliance, andon August 31, 2017, concluded a business alliance agreement with FamilyMart UNY HD, and at thesame time, FamilyMart UNY HD transferred 40% of its 100% ownership of the shares of UNY to theCompany on November 21, 2017.
Based on this business alliance agreement, the Company and UNY worked to develop double-namestores for six existing Apita and Piago stores. As described in “1. Reason for the Share Acquisition”
of “I. Acquisition of Shares of UNY Accompanied by Changes in Subsidiaries, etc. (Conversion into
Subsidiary and Conversion into Sub-subsidiary),” after seeing the steady growth of UNY stores that
had been converted into a new store format in cooperation with the Company that has strengths inlarge-scale retail store operations know-how for six months before approximately one year has elapsed
since the business alliance between the Company and FamilyMart UNY HD had begun, FamilyMart
UNY HD and the Company began discussions once again on the approach towards a capital
relationship with UNY in around late August 2018. As a result of the continued discussions, it was
decided to transfer all of the remaining shares of UNY held by FamilyMart UNY HD to the Company,
and the share transfer agreement related to the Share Acquisition was signed. Going forward, theCompany will further discuss with FamilyMart UNY HD on business alliance policies and otherdetails after the Tender Offer is implemented.
In addition, the cooperation between FamilyMart UNY HD and the Company has gone beyond justthe GMS Business of FamilyMart UNY HD to include partnerships in the CVS Business. Specifically,
FamilyMart Tachikawa Minami-dori Store, FamilyMart Otori Jinja Mae Store, and FamilyMart
Setagaya Kamata 3-Chome Store, were renewed and reopened in June 2018 as joint test stores that
pursue the joy of shopping by incorporating the product lineup, and sales floor planning and operations
methods of Don Quijote stores, and strong results have been achieved for these stores currently as
daily sales exceeded those before the store renewal supported by measures such as the rolling out of
products in which both companies have strength.
While the operating environment for the retail industry becomes even more challenging going
forward amid shrinking markets due to a declining population and rising personnel cost levels due toa shortage of human resources at stores and in the logistics sector, consumers are also rapidly
becoming more selective. Under such circumstances, it is increasingly necessary to offer consumers
products that are more attractive and more price-competitive. To this end, it is necessary to create

12attractive stores, diversify sales channels, streamline operations by developing and offering better
products, and also to effectively utilize management resources, on a certain scale. Against thisbackdrop, FamilyMart UNY HD deemed that going one more step further ahead of the current
business alliance and further strengthening relationships with the Group, which includes the newaddition of UNY, and developing the distribution group with its strong presence would be essential.
The total sales of the three companies of the Company, UNY, and FamilyMart are around 4.7 trillion
yen, and the going forward, efforts will be made to continue the sharing of the strengths and knowhow of each company beyond industry boundaries and further advance joint product development,purchases, and sales promotion in order to enhance competitiveness and strengthen profitability. In
addition, the building of the customer base including data marketing and cooperation in areas such as
financial services will be pursued in an aim to offer more attractive products and services in line with
the needs of customers. Furthermore, in the expansion of the overseas business, in addition to
FamilyMart UNY HD and the Group, the use of the overseas network of the ITOCHU Corporationthat is the parent company of FamilyMart UNY HD is being considered for joint overseas expansion.
In light of this background, in early September 2018, FamilyMart UNY HD proposed to theCompany the implementation of a Tender Offer for the purpose of converting the Company into equity
method affiliate, and as a result of careful discussions and studies with the Company, FamilyMart
UNY HD decided, for the purpose of converting the Company into equity method affiliate, to havethe Tender Offeror acquire the Company’s Shares by way of the Tender Offer for the Company’s
Shares, with 32,108,700 shares (ownership ratio: 20.17%) as the upper limit on the number of shares
to be purchased.
In addition, as described above, FamilyMart UNY HD also decided to transfer all of the shares of
its consolidated subsidiary UNY to the Company (the “Transfer”). The capital relationship between
FamilyMart UNY HD, the Company, and UNY after the Tender Offer and the Transfer is as follows.
(Current state)

FamilyMart UNY
Holdings Co., Ltd.

100%

FamilyMart Co., Ltd.

The Company

60%

40%

UNY CO., LTD.

13

(Immediately after the Transfer and the Tender Offer)

FamilyMart UNY
Holdings Co., Ltd.

100%

100%

The Company

Max.
20.17%
100%

The Tender Offeror(SPC)

FamilyMart Co., Ltd.

UNY CO., LTD.

3) Processes and Reasons for Decision by the Company to Agree to the Tender Offer(i) Processes and reasons for decision by the Company
Since the signing of the business alliance agreement with FamilyMart UNY HD on August 31, 2017,
the Company has continued to explore opportunities for partnerships beyond the boundaries ofindustries in the discount store business, GMS Business, and CVS Business.
Subsequently, as described above in “1. Reason for the Share Acquisition” of “I. Acquisition of
Shares of UNY Accompanied by Changes in Subsidiaries, etc. (Conversion into Subsidiary andConversion into Sub-subsidiary),” the Company and UNY worked to develop double-name stores for
six existing Apita and Piago stores, and the results achieved with these double-name stores led to highhopes for further strengthened alliance with UNY using the new store format as a model case.
In addition, as described above in “2) Purpose and Background of the Tender Offer”, thecooperation between the Company and FamilyMart UNY HD has gone beyond just the GMS Businessto include partnerships in the CVS Business. In June 2018, three FamilyMart-type joint experimentstores that pursue the joy of shopping uniquely possible for real stores were opened in Tokyo byleveraging know-how, such as on product lineup in line with the needs of the region and creating
attractive sales floors through compression displays, and strong results have been achieved for thesestores currently.
As described above, the Company and FamilyMart UNY HD have created a success model for thecollaboration between both companies through the business alliance since August 31, 2017.
However, looking at the retail industry overall, with the approach of waves of change in the businessenvironment due to the impact of factors including the further emergence of e-commerce and theadvance of declining birthrates and aging populations, the Company has reached the decision that, inorder to survive in this difficult operating environment, it would be essential to strengthen structuresthat enables the Company to respond to drastic changes in the future through the establishment of the14

3rd highest economic sphere in the Japanese retail industry with the total revenues of 4.7 trillion yenof the three companies of the Company, UNY, and FamilyMart (The figures were calculated using the
IR materials of other companies engaged in the retail business. The total amount of non-consolidatedbasis net sales of FamilyMart (including sale of franchisees) and UNY for the fiscal year ended
February 28, 2018 were 3,728.8 billion yen. Consolidated net sales of the Company for the fiscal year
ended June 30, 2018 were 941.5 billion yen.) and the continued sharing of the strengths and knowhow of both companies beyond industry boundaries.
In light of this background, FamilyMart UNY HD proposed to the Company the implementation ofa Tender Offer for the purpose of converting the Company into an equity method affiliate in early
September 2018, and the three companies conducted further discussions and studies on the appropriate
form of organization from the perspective of maximizing synergies between the Company,
FamilyMart UNY HD, and UNY. As a result, the conclusion was reached that going beyond the current
business alliance relationship of the Company and FamilyMart UNY HD to make the Company a newequity method affiliate of FamilyMart UNY HD, sharing management resources with FamilyMart
UNY HD and its parent company ITOCHU Corporation, and working to make the alliance between
both companies more solid and integrated in order to strengthen growth potential and profitability
would be essential for continued improvements in the corporate value of the Company.
(ii) Approval of all Directors (including Audit & Supervisory Committee Members) at the Company
In regard to the above, a resolution was made at the Board of Directors’ meeting held today withthe approval of all Directors (including Audit & Supervisory Committee Members) to agree to theTender Offer if the Tender Offer is started as the opinion of the Company as of today. In addition, in
consideration of the fact that the Company’s Shares will remain listed even after the Tender Offer andthere will be an upper limit on the number of shares to be purchased under this Tender Offer, and inlight of that sufficient reasonableness can be recognized in the option of holding the Company’s Shares
after the Tender Offer as a shareholder of the Company, it was resolved at this Board of Directors’
meeting to leave the decision on whether to respond to the Tender Offer up to shareholders because
the Company’s Shares will remain listed even after the Tender Offer.
The Board of Directors held today related to the resolution above was participated by all 13
Directors (including 4 Outside Directors) of the Company, and it was resolved unanimously with theapproval of all Directors (including Audit & Supervisory Committee Members).
In addition, because the Tender Offer is scheduled to be started when certain preconditions are
fulfilled, such as that the Company’s Board of Directors has resolved to express an opinion that itsupports the Tender Offer, and has not resolved to withdraw that resolution or made any resolutionthat contradicts that resolution, and a portion of the details of the Tender Offer have not been decided
on as of today, including the details of the Tender Offeror, the Company’s Board of Directors will
make another resolution on the expression of an opinion regarding the Tender Offer when the Tender
Offer is started.

15

(iii) Advice from an independent legal advisor and independent financial advisors to the Company
In order to ensure the transparency and fairness of the decision-making process by the Company’s
Board of Directors concerning the Tender Offer, the Company has assigned Nagashima Ohno &Tsunematsu as its external legal advisor, and Mizuho Bank, Ltd. and SMBC Nikko Securities Inc. as
its financial advisors, and advice has been received on the decision-making methods, processes, andother points related to the Company’s Board of Directors concerning the Tender Offer.
4) Management policies after the Tender Offer
FamilyMart UNY HD will strengthen the alliance while respecting the independence of theCompany’s management after the Tender Offer. In terms of the Company’s management structure andcomposition of Directors following the Tender Offer, although there are plans for the Company toaccept at least one Director from FamilyMart UNY HD, no other matters concerning personnel havebeen decided on at this point in time, and they will be subject to discussions in the future.
The Company resolved at the Board of Directors held today to nominate Takao Yasuda, the founderof the Company, as a candidate for part-time Director, in addition to at least one Director planned tobe accepted from FamilyMart UNY HD. For details of the changes to Directors, please refer to theCompany’s announcement “Announcement Regarding Partial Amendments to the Articles ofIncorporation to Change Trade Name, and Change in Officers” released today.
(3) Matters concerning calculation
1) Response by the Company
As described above in “3) Processes and Reasons for Decision by the Company to Agree to theTender Offer” of “(2) Basis and Reason for Opinion on the Tender Offer,” regarding the Tender Offer
Price, because FamilyMart UNY HD does not intend to delist the Company’s Shares after the Tender
Offer and the policy is to continue the listing of the Company’s Shares after the Tender Offer, theCompany has resolved to take a neutral stance on the appropriateness of the Tender Offer Price anddefer from making a judgment. Therefore, the Company has not acquired an independent share value
assessment report from a third-party calculation institution regarding the Tender Offer, and has not
examined the appropriateness of the Tender Offer Price.
2) Acquisition of a share value assessment report from an independent third-party calculation institution
by FamilyMart UNY HD
In order to ensure the fairness of the Tender Offer Price, FamilyMart UNY HD has requested
Nomura Securities Co., Ltd. (“Nomura Securities”), which is the financial advisor of FamilyMart
UNY HD to calculate the share value of the Company’s Shares as a third-party calculation institution
independent from FamilyMart UNY HD and the Company in deciding on the Tender Offer Price.

16

After considering factors including the Company’s financial position and trends in the market shareprice of the Company’s Shares, Nomura Securities decided that it would be appropriate to conduct a
multifaceted assessment, and as a result of consideration on the calculation method that should be
adopted from among multiple share value calculation methods, it used the average market share pricemethod and DCF method to calculate the share value of the Company’s Shares under the assumptionthat the Company is a going concern. FamilyMart UNY HD acquired the share value assessment reportfrom Nomura Securities on October 10, 2018. Nomura Securities is not a related party of FamilyMart
UNY HD or the Company, and has no material interests in relation to the Tender Offer. In addition,
FamilyMart UNY HD has not acquired an opinion letter on the fairness of the Tender Offer Price (afairness opinion) from Nomura Securities.
The range of share value per share of the Company’s Shares calculated based on each of the methods
above by Nomura Securities is as follows.
Average market share price method: 5,365 yen to 6,050 yen
DCF method: 5,352 yen to 7,953 yen
Under the average market share price method, the range of share value per share of the Company’s
Shares was analyzed as between 5,365 yen and 6,050 yen, based on the closing price of the Company’s
Shares on the First Section of the Tokyo Stock Exchange on the base date of 6,050 yen, using October
10, 2018 as a base date, the simple average of the closing price for the past five business days of 5,746
yen (rounded off to the nearest whole number; same applies for the simple average of the closing pricebelow), the simple average of the closing price for the past one month of 5,610 yen, the simple averageof the closing price for the past three months of 5,365 yen, and the simple average of the closing pricefor the past six months of 5,498 yen.
Under the DCF method, the range of share value per share of the Company’s Shares was analyzed
as between 5,352 yen to 7,953 yen by conducting an analysis of the free cash flows the Company is
expected to generate that is discounted to the current value by a set discount rate to find the Company’s
corporate value and share value, based on the Company’s future earnings projections from the fiscal
year ending June 30, 2019 onwards in consideration of various factors including the business plansfrom the fiscal year ending June 30, 2019 to the fiscal year ending June 30, 2023 confirmed by
FamilyMart UNY HD that were provided by the Company, recent earnings trends, and publicly
released information.
Because it is currently difficult to specifically calculate the synergies that can be expected from theimplementation of the Transaction and the Transfer, consideration has not been given to the synergies
in the business plans that are the basis for the calculation through the DCF method above. However,consideration has been given to the assumption of UNY becoming a wholly-owned subsidiary of theCompany through the Transfer.
3) Background and calculation basis, etc. leading to the decision on the Tender Offer Price17

According to the FamilyMart UNY HD Press Release, FamilyMart UNY HD proposed to theCompany the implementation of a Tender Offer for the purpose of converting the Company into an
equity method affiliate in order to strengthen the relationship between both companies in around early
September 2018, and FamilyMart UNY HD used this as an opportunity to appoint Nomura Securities
as a financial advisor and a third-party calculation institution independent from FamilyMart UNY HD
and the Company and Mori Hamada & Matsumoto as a legal advisor in early September 2018 in orderto establish a structure for discussions and negotiations related to the Tender Offer.
Subsequently, FamilyMart UNY HD conducted due diligence on the Company from early
September 2018 to early October 2018, and then in early October 2018, FamilyMart UNY HD and
the Company came to share the recognition that making the Company into an equity method affiliate
of FamilyMart UNY HD would make it possible to improve the corporate value over the medium tolong term of both companies by further strengthening relationship between both companies fordevelopment into a distribution group with a strong presence, further advancing joint productdevelopment, purchases, and sales promotion, and also pursuing cooperation in areas such as data
marketing, financial services, and overseas expansion. After that, on October 9, 2018, FamilyMart
UNY HD proposed to the Company a summary of the conditions for the Tender Offer, including theTender Offer Price of 6,600 yen.
Then, at the Board of Directors’ meeting of FamilyMart UNY HD held today, FamilyMart UNY HD
decided to conduct the Tender Offer for the purpose of making the Company into an equity method
affiliate, and decided that the Tender Offer Price shall be 6,600 yen after comprehensively consideringsuch factors as the results of due diligence on the Company conducted from early September 2018 toearly October 2018, whether the Company’s Board of Directors agrees to the Tender Offer, trends inthe market share price of the Company’s Shares, cases of premium granted in tender offers for sharecertificates, etc. by other issuers in the past, and the prospect for response to the Tender Offer, while
taking into consideration the details and results of the calculation stated in the share value assessment
report.
The Tender Offer Price is a price that adds a premium of 9.09% (rounded off to 2 decimal places;same applies for premiums (%) on the stock prices below) to the closing price of the Company’s
Shares of 6,050 yen on the First Section of the Tokyo Stock Exchange on October 10, 2018 that is thebusiness day prior to the announcement date of the Tender Offer, 17.65% to the simple average of theclosing price for the past one month of 5,610 yen, 23.02 % to the simple average of the closing pricefor the past three months of 5,365 yen, and 20.04% to the simple average of the closing price for the
past six months of 5,498 yen.
(4) Plans for additional acquisition of share certificates, etc. after the Tender Offer
As described above, FamilyMart UNY HD plans to hold at least 20% of total number of shareholder
voting rights through the Tender Offeror by way of the Tender Offer, and make the Company into an
equity method affiliate of FamilyMart UNY HD.
If this objective is not achieved by way of the Tender Offer, FamilyMart UNY HD still has the intent to18

additionally acquire Company’s Shares by means of market trading and other methods depending onmarket trends and other factors, although details have yet to be decided at this point in time.
As part of such an additional acquisition, the Tender Offeror is considering borrowing Company’s
Shares from DQ WINDMOLEN B. V., which is the largest and a major shareholder of the Company (no.
of shares held: 23,407,000 (ownership ratio: 14.71%); the “Lender”), to hold voting rights relating theborrowed shares, depending on the response to the Tender Offer. In the event that such a borrowing is
implemented, the Tender Offeror will acquire shares of the Company at all reasonable time by way ofmarket trading and other methods after the implementation of the borrowing, and return the borrowed
shares to the Lender.
(5) Prospects for Maintaining the Listing and Reasons Therefor
As of today, the Company’s Shares are listed on the First Section of the Tokyo Stock Exchange, andalthough the Tender Offer is not intended for delisting the Company’s Shares, FamilyMart UNY HD willconduct a Tender Offer through the Tender Offeror with 32,108,700 shares (Note) (ownership ratio:
20.17%) as the upper limit on the number of shares to be purchased. Accordingly, the Company’s Shares
will remain listed on the First Section of the Tokyo Stock Exchange even after the Tender Offer is made.
(Note) The upper limit on the number of shares to be purchased in the Tender Offer (scheduled to be
32,108,700 shares) is equivalent to 20.00% (20.30% of the total number of shareholder voting
rights of the Company) of the number of shares (160,561,427 shares) calculated by adding to
the total number of issued shares as of June 30, 2018 (158,193,160 shares) stated in the
Securities Report of the Company the number of the Company’s Shares (979,200 shares) to beissued upon exercise of the subscription rights (9,779 units) excluding a decrease (a total of 12
units) due to the exercise of subscription right (3 units) and the termination of subscription
rights (9 units) reported by the Company as a fluctuation from July 1, 2018 to October 10, 2018,from the number of subscription rights (9,791 units) as of June 30, 2018, the number of shares(300 shares) granted for the subscription rights (3 units) exercised as described above, and acertain number of shares (1,393,400 shares) taking into consideration the issuance ofsubscription rights in the future, and then deducting the number of treasury shares (4,633
shares) held by the Company as of that date. However, the final upper limit on the number ofshares to be purchased will be decided in consideration of the number of treasury shares heldby the Company according to the most recent information available as of the start of the Tender
Offer before the Tender Offer starts.
4. Important Agreements Regarding the Response to the Tender Offer between the Tender Offeror and theShareholders of the Company
Not applicable
5. Details of Benefits Provided by the Tender Offeror or Parties that Have Special Relationship with the19Tender Offeror
Not applicable
6. Response Policy for Basic Policy Relating to the Control of the Company
Not applicable
7. Questions Regarding the Tender Offeror
Not applicable
8. Requests for Extension of the Tender Offer Period
Undecided
9. Outlook
For details on the policies after the Tender Offer, please refer to “4) Management policies after theTender Offer” of “(2) Basis and Reason for Opinion on the Tender Offer,” and “(5) Prospects for
Maintaining the Listing and Reasons Therefor” of “3. Details, Basis, and Reason for Opinion on theTender Offer” above.
Any additional information arising from this matter that should be disclosed will be disclosed promptly.
End of the document20