Translation
March 27, 2024
To whom it may concern:
Company Name:

Lawson, Inc.

Name of Representative:

Sadanobu Takemasu
President, Representative Director(Securities Code: 2651 TSE Prime)

Contact:

Tomoki Takanishi
Senior Vice President andDivision Director of Financial Administration Division

Notice of Expression of Our Opinion in Favor of the Commencement of and Recommendation to Tenderin the Tender Offer for Company’s Share Certificates by KDDI Corporation
The Company hereby announces that regarding the tender offer for the Company’s shares (the “Company Shares”), Share
Options (as defined in “(2) Share options” under “2. Price of tender offer” below; hereinafter the same) and American
Depositary Receipts (as defined in “(3) Depositary receipts for share certificates” under “2. Price of tender offer” below;
hereinafter the same) by KDDI Corporation (the “Offeror”) (the “Tender Offer”) which was publicly announced in the“Notice of Expression of Our Opinion in Favor of the Planned Commencement of and Recommendation to Tender in theTender Offer for Company’s Share Certificates by KDDI Corporation and Notice of Capital and Business Alliance” dated
February 6, 2024 (including the amendments made by the “(Amendment) Notice Regarding Partial Amendment to “Noticeof Expression of Our Opinion in Favor of the Planned Commencement of and Recommendation to Tender in the Tender
Offer for Company’s Share Certificates by KDDI Corporation and Notice of Capital and Business Alliance” ” published by
the Company on February 29, 2024) (“Company’s Press Release dated February 6, 2024”), the Company received a noticefrom the Offeror and Mitsubishi Corporation (“MC”; the Offeror and MC collectively referred to as the “Offeror Related
Parties”) stating that they would like to commence the Tendor Offer on March 28, 2024 and therefore, the Company once
again resolved at its board of directors meeting held today to the effect that it shall (i) express its opinion in favor of the Tender
Offer, (ii) recommend that the Company’s shareholders tender their shares in the Tender Offer, (iii) recommend that theowners of the American Depositary Receipts tender in the Tender Offer after delivering their American Depositary Receipts
to the Depositary Bank (as defined in “(3) Depositary receipts for share certificates” under “2. Price of tender offer” below)
in advance and receiving delivery of the Company Shares related to the American Depositary Shares (as defined in “(3)Depositary receipts for share certificates” under “2. Price of tender offer” below) represented on their American Depositary
Receipts, and (iv) leave the decision to the holders of Share Options (the “Share Option Holders”) whether or not to tenderin the Tender Offer.
In addition, the Company resolved at its board of directors meeting held on February 6, 2024 to enter into a capital andbusiness alliance agreement with the Offeror Related Parties (the “Capital and Business Alliance Agreement”) as describedin “(1) Capital and Business Alliance Agreement” under “4. Tendering shares by the Company’s shareholders in the Tender
Offer and other material agreements relating to the Tender Offer” below and thus, entered into the Capital and Business
Alliance Agreement with the Offeror Related Parties as of the same day.
As publicly announced in the “Notice Regarding Planned Commencement of Tender Offer for Shares of Lawson, Inc.

1

(Securities Code: 2651) and the Execution of the Capital and Business Alliance Agreement” dated February 6, 2024
(including the amendments made by the “(Amendment) Notice Regarding Partial Amendment to “Notice Regarding Planned
Commencement of Tender Offer for Shares of Lawson, Inc. (Securities Code: 2651) and the Execution of the Capital andBusiness Alliance Agreement” ” published by the Offeror on February 7, 2024 and the “(Amendment) Notice Regarding
Partial Amendment to “Notice Regarding Planned Commencement of Tender Offer for Shares of Lawson, Inc. (Securities
Code: 2651) and the Execution of the Capital and Business Alliance Agreement” ” published by the Offeror on February 29,2024), with respect to the Tender Offer, it was expected that a certain period of time would be necessary to complete theprocedures and actions required under the competition laws (the “Competition Law Procedures”) of Japan, China, South
Korea, and the EU. Therefore, according to the Offeror Related Parties, the Tender Offer was scheduled to be commenced
promptly upon the completion of such procedures and actions and the satisfaction (or waiver by the Offeror Related Parties)of the conditions precedent (Note 1) (the “Conditions Precedent”) provided in the master agreement (the “Master
Agreement”) dated February 6, 2024 entered into between the Offeror and MC which sets forth that the Offeror shall acquire
the Company’s Share Certificates through the Tender Offer.
Subsequently, as the Offeror confirmed the completion of the Competition Law Procedures and the satisfaction of all theConditions Precedent, it decided to commence the Tender Offer from March 28, 2024.
Both of the above resolutions of the board of directors of the Company were passed on the assumption that, after the Tender
Offer and the series of procedures planned to be carried out after the Tender Offer as described in “(5) Policies onorganizational restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)” under “3. Details of, andgrounds and reasons for the opinion on the Tender Offer” (the “Squeeze-out Procedure”), the Offeror Related Parties will be
the only shareholders of the Company and the Company Shares will be delisted.
(Note ) Under the Master Agreement, the commencement of the Tender Offer by the Offeror is subject to the satisfaction of
the following: (I) the representations and warranties made by the Offeror Related Parties (for details of such
representations and warranties, please refer to “(2) Master Agreement” under “4. Tendering shares by the Company’s
shareholders in the Tender Offer and other material agreements relating to the Tender Offer” below) are all true andaccurate in all material respects; (II) all of the Definitive Agreements (as defined in “(I) Outline of the Tender Offer”
under “(2) Grounds and reasons for the opinion on the Tender Offer” under “3. Details of, and grounds and reasons
for, the opinion on the Tender Offer” below; hereinafter the same) have been validly and lawfully executed and remain
valid, and all obligations to be fulfilled or complied with by each party under the Definitive Agreements prior to thecommencement of the Tender Offer have been fulfilled or complied with in all material respects; (III) the Company’sboard of directors has approved the Tender Offer and to the Company’s shareholders to recommend that they tendertheir shares in the Tender Offer (the “Opinion in Favor of Tender Offer”; hereinafter the same) with the unanimous
consent of all disinterested directors, and the Opinion in Favor of Tender Offer has been made is made public and it
is maintained; (IV) the Special Committee (as defined in “(IV) Decision-making process leading to and grounds forthe opinion in favor of the Tender Offer by the Company” under “(2) Grounds and reasons for the opinion on theTender Offer” under “3. Details of, and grounds and reasons for, the opinion on the Tender Offer” below; hereinafter
the same), which was established in connection with the Tender Offer, has made a report to the Company’s board of
directors that it is appropriate to express the Opinion in Favor of Tender Offer and such report has been made public,
and the report is maintained; (V) all Competition Law Procedures and other procedures with relevant authorities
necessary for the implementation of the Transactions (as defined in“(I) Outline of the Tender Offer” under “(2)Grounds and reasons for the opinion on the Tender Offer” under “3. Details of, and grounds and reasons for, theopinion on the Tender Offer” below; hereinafter the same) have been completed; (VI) the implementation of any of
the Transactions do not constitute a violation of laws and regulations, and there is no determination, etc. by any

2relevant authority that restricts or prohibits the implementation of any of the Transactions; and (VII) as of thecommencement date of the Tender Offer, there are no material facts regarding the Company’s business, etc.
(Article 166, paragraph 2 of the Act) that have not been disclosed (Article 166, paragraph 4 of the Act) and there areno facts regarding the implementation of the tender offer, etc. (Article 167, paragraph 2 of the Act) with respect to theCompany’s Share Certificates (as defined in “(I) Outline of the Tender Offer” under “(2) Grounds and reasons for theopinion on the Tender Offer” under “3. Details of, and grounds and reasons for, the opinion on the Tender Offer”
below) that have not been disclosed (Article 167, paragraph 4 of the Act); (VIII) from February 6, 2024 onward, any
event that may have a material adverse effect on the business, financial condition, operating results, or cash flows, orthe prospects thereof of the Company Group (as defined in “(II) Background, purposes and decision-making process
leading to the Offeror Related Parties’ decision to conduct the Tender Offer ” under “(2) Grounds and reasons for theopinion on the Tender Offer” under “3. Details of, and grounds and reasons for, the opinion on the Tender Offer”
below), or any other situation that may make it difficult to achieve the purpose of the Transactions has not occurredor become apparent or is not reasonably expected to occur or become apparent, and no significant changes in domestic
and international stock market conditions, other market environments, financial environments, or economic
environments have occurred or become apparent or are not reasonably expected to occur or become apparent.
Particulars
1. Summary of the Offeror
(1)

Name

KDDI Corporation(2)

Address

2-3-2 Nishishinjuku, Shinjuku-ku, Tokyo

(3)

Title

/name

of

representative

Makoto Takahashi, President, Representative Director and CEO(4)

Details of businessTelecommunications business(5)

Stated capital

141,852 million yen (as of December 31, 2023)(6)

Date of establishment

June 1, 1984

(7)

Major shareholders and

The Master Trust Bank of Japan, Ltd. (trust account)

16.37%

shareholding ratio

Kyocera Corporation

16.00%(as of September 30,

Toyota Motor Corporation

12.08%2023) (Note 1)

Custody Bank of Japan, Ltd. (trust account)

6.96%

STATE STREET BANK WEST CLIENT - TREATY 505234

1.55%(Standing Proxy: Settlement & Clearing Services Department,
Mizuho Bank, Ltd.)JP Morgan Securities Japan Co., Ltd.

1.19%

SSBTC CLIENT OMNIBUS ACCOUNT (Standing proxy: The

1.05%

Hongkong and Shanghai Banking Corporation Limited, Tokyo
Branch)JP MORGAN CHASE BANK 385781 (Standing Proxy: Settlement

1.05%& Clearing Services Department, Mizuho Bank, Ltd.)
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

0.93%

STATE STREET BANK AND TRUST COMPANY 505103

0.88%(Standing Proxy: Settlement & Clearing Services Department,
Mizuho Bank, Ltd.)

3

(8)

Relationship between the Company and the Offeror
As of today, the Offeror owns 2,110,000 Company Shares (Shareholding Ratio

Capital relationship(Note 2): 2.11%).

Personnel relationship

Not applicable.
The Offeror has executed the capital and business alliance agreement with theBusiness relationship

Company. In addition, the Offeror has executed a business alliance agreementwith the Company, MC, and menu, Inc.

Applicablestatusrelated partiesofNot applicable.

(Note 1) The description of shareholding ratio in “Major shareholders and shareholding ratio (as of September 30, 2023)”
sets out the ratio of the number of shares held to the total number of the issued shares of the Offeror (excluding treasury
shares) as of September 30, 2023 (round down to the second decimal place).
(Note 2) “Shareholding Ratio” refers to the ratio (rounded to the second decimal place; hereinafter the same applies in thecalculation of the Shareholding Ratio) of the number of Company Shares to the number of shares(100,183,915 shares) (the “Total Number of Shares After Adjustment for Diluted Shares”) which is the total number
of issued shares as of January 12, 2024 described in the third Quarterly Report for the 49th fiscal year (the “Company’s
Third Quarterly Report”) submitted by the Company on January 12, 2024 of 100,300,000 shares, plus
106,000 Company Shares, to be issued upon exercise of 1,060 Share Options reported by the Company as remaining
as of February 29, 2024 (Note 3), minus the number of treasury shares held by the Company as of February 29, 2024
as reported by the Company (222,085 shares).
(Note 3) The breakdown of the 1,060 Share Options is as indicated in the table below (the name of each share option isdefined in “(2) Share options” under “2. Price of tender offer” below).
Name of Share Options

Number of Share Options as of

Number of Company Shares to be

February 29, 2024 (units)

Issued (shares)

14th Series of Share Options

27

2,700

16th Series of Share Options

38

3,800

17th Series of Share Options

62

6,200

18th Series of Share Options

18

1,800

19th Series of Share Options

74

7,400

20th Series of Share Options

92

9,200

21st Series of Share Options

135

13,50022nd Series of Share Options

162

16,20023rd Series of Share Options

186

18,60024th Series of Share Options

266

26,6002. Price of tender offer(1) 10,360 yen per Company Shares(2) Share options(I) 1 yen per share option issued pursuant to the resolution of the Company’s board of directors meeting held on
March 25, 2015 (the “14th Series of Share Options”) (the exercise period is from April 10, 2015 to March 24,
2035)

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(II) 1 yen per share option issued pursuant to the resolution of the Company’s board of directors meeting held on
April 13, 2016 (the “16th Series of Share Options”) (the exercise period is from May 2, 2016 to April 13,2036)(III) 1 yen per share option issued pursuant to the resolution of the Company’s board of directors meeting held on
April 12, 2017 (the “17th Series of Share Options”) (the exercise period is from May 1, 2017 to April 11,2037)(IV) 1 yen per share option issued pursuant to the resolution of the Company’s board of directors meeting held on
July 5, 2017 (the “18th Series of Share Options”) (the exercise period is from July 21, 2017 to July 4, 2037)(V) 1 yen per share option issued pursuant to the resolution of the Company’s board of directors meeting held on
May 22, 2018 (the “19th Series of Share Options”) (the exercise period is from June 8, 2018 to May 21, 2038)(VI) 1 yen per share option issued pursuant to the resolution of the Company’s board of directors meeting held on
May 21, 2019 (the “20th Series of Share Options”) (the exercise period is from June 7, 2019 to May 20, 2039)(VII) 1 yen per share option issued pursuant to the resolution of the Company’s board of directors meeting held on
May 27, 2020 (the “21st Series of Share Options”) (the exercise period is from June 12, 2020 to May 26,
2040)(VIII) 1 yen per share option issued pursuant to the resolution of the Company’s board of directors meeting held on
May 25, 2021 (the “22nd Series of Share Options”) (the exercise period is from June 11, 2021 to May 24,
2041)(IX) 1 yen per share option issued pursuant to the resolution of the Company’s board of directors meeting held on
May 25, 2022 (the “23rd Series of Share Options”) (the exercise period is from June 10, 2022 to May 24,
2042)(X) 1 yen per share option issued pursuant to the resolution of the Company’s board of directors meeting held on
May 24, 2023 (the “24th Series of Share Options”) (the exercise period is from June 9, 2023 to May 23, 2043)(The share options in (I) through (X) above are collectively referred to as the “Share Options”.)(3) Depositary receipts for share certificates
10,360 yen per share of the Company Shares related to the American depositary shares (the “American Depositary
Shares”) deposited with Citibank, N.A. and Deutsche Bank Trust Company Americas (collectively, the “Depositary
Banks”) and represented by the American depositary receipts related to the Company Shares issued by the
Depositary Banks in the United States (the “American Depositary Receipts”).
(Note) According to the notification for the American Depositary Receipts (Form F-6EF) submitted by Citibank, N.A.
as of February 13, 2018 to the Securities and Exchange Commission, and the one submitted by Deutsche
Bank Trust Company Americas as of April 2, 2018 to the Securities and Exchange Commission (collectively,
the “American Depositary Receipts Notifications”), the American Depositary Receipts for the Company
Shares have been issued.

However, the Company was not involved in the issuance of these American

Depositary Receipts. According to the Offeror, since it aims to acquire all of the Company Shares (excluding
the Company Shares owned by the Offeror Related Parties and the treasury shares owned by the Company)in the Tender Offer, the Offeror, in accordance with Article 27-2, paragraph (5) of the Act and Article 8,paragraph (5), item (iii) of the Order for Enforcement of the Financial Instruments and Exchange Act (Cabinet
Order No. 321 of 1965, as amended), includes the American Depositary Receipts as the type of sharecertificates, etc., to be purchased, because it is necessary to solicit applications for sales, etc., for all the sharecertificates, etc. issued by the Company. On the other hand, while the American Depositary Receipts are
securities issued in the United States, according to the Offeror, it has been determined that it will not be5possible for the Offeror, which is a resident of Japan, to acquire the American Depositary Receipts themselvesin the Tender Offer conducted outside the United States because there are no financial instruments business
operators, etc., that can handle the acquisition as a tender offer agent in practice. Thus, according to theOfferor, in the Tender Offer, the Offeror will accept tenders of the Company Shares and share options only,
and instead of accepting tenders of the American Depositary Receipts themselves, it will accept tenders of theCompany Shares related to the American Depositary Shares represented by the American Depositary Receipts.
Therefore, the owners of the American Depositary Receipts who wish to tender in the Tender Offer should, in
advance, deliver the American Depositary Receipts to the Depositary Banks and receive the delivery of theCompany Shares related to the American Depositary Shares represented by the American Depositary Receipts.
3. Details of, and grounds and reasons for, the opinion on the Tender Offer(1) Details of the opinion on the Tender Offer
The Company resolved at its board of directors meeting held on February 6, 2024, based on the grounds and reasonsstated in “(2) the Grounds and reasons for the opinion on the Tender Offer” below, as the Company’s opinion as of thesame day, to the effect that, if the Tender Offer is commenced, it shall express its opinion in favor of the Tender Offerand recommend that the Company’s shareholders tender their shares in the Tender Offer, that it recommends that theowners of the American Depositary Receipts tender in the Tender Offer after delivering their American Depositary
Receipts to the Depositary Bank in advance and receiving delivery of the Company Shares related to American
Depositary Shares represented on the American Depositary Receipts, and that it leaves the decision to the Share Option
Holders whether or not to tender in the Tender Offer. The aforementioned board of directors meeting resolved thefollowing procedures for expressing the Company’s opinion. That is, as described in “(II) Establishment of independent
special committee at the Company and procurement of a report from the special committee” under “(6) Measures toensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures
to avoid conflicts of interest” below, the board of directors meeting resolved to, when the Tender Offer is commenced,
request the Special Committee established by the Company to consider whether or not the opinion expressed by theSpecial Committee to the board of directors of the Company as of February 5, 2024 has changed, and if it has not, toinform the board of the directors of the Company to that effect, and if it has changed, to state its changed opinion, andbased on such opinion of the Special Committee, the board of directors of the Company will restate its opinion on theTender Offer when the Tender Offer is commenced.
Subsequently, on February 21, 2024, the Company was informed by the Offeror that it expected that the Competition
Law Procedures will be completed by late March 2024, and assuming such expectation, it expected the Tender Offer tobe commenced on March 28, 2024. Further, on March 22, 2024, the Company was informed by the Offeror that, as
the Competition Law Procedures have been completed, the Offeror intends to commence the Tender offer on March 28,
2024, subject to the satisfaction of the Conditions Precedent.
In response to this, on March 25, 2024, the Company requested the Special Committee to consider whether or not theopinion expressed by the Special Committee to the board of directors of the Company as of February 5, 2024 haschanged, and if it has not, to inform the board of the directors of the Company to that effect, and if it has changed, tostate its changed opinion, and received on March 26, 2024 the submission of the report by the Special Committee dated
March 26, 2024 stating that the Special Committee does not consider any change is necessary to the content of the reportsubmitted by the Special Committee to the board of directors meeting dated February 5, 2024 (the “Report dated March
26, 2024”; for the summary of the Report dated March 26, 2024 and specific activities of the Special Committee, pleaserefer to “(II) Establishment of independent special committee at the Company and procurement of a report from thespecial committee” of “(6) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness6

of the Tender Offer Price and measures to avoid conflicts of interest” below.). Accordingly, the Company again
carefully discussed and considered the contents of the terms and conditions of the Tender Offer in light of the contentsof the Report dated March 26, 2024 as well as the Company’s business performance and changes in the market
environment, etc. since the board of directors meeting on February 6, 2024.
As a result, the Company still believes as of today that the Transactions will contribute to the enhancement of theCompany’s corporate value, and the purpose of the Transactions and the meaning and necessity of achieving such
purpose have only been enhanced and never decreased, and that there are no factors that would change the Company’s
decision about the Tender Offer as of February 6, 2024. Therefore, the Company again resolved at its board of directors
meeting held today, that it shall express its opinion in favor of the Tender Offer and recommend that the Company’s
shareholders tender their shares in the Tender Offer, that it recommends that the owners of the American Depositary
Receipts tender in the Tender Offer after delivering their American Depositary Receipts to the Depositary Bank inadvance and receiving delivery of the Company Shares related to American Depositary Shares represented on theAmerican Depositary Receipts, and that it leaves the decision to the Share Option Holders whether or not to tender in
the Tender Offer. The Company also reported to the Offeror today that, as of today, there are no undisclosed material
facts concerning the Company’s businesses or undisclosed facts relating to the implementation of tender offers, etc.
concerning the Company’s Share Certificates.
The both resolutions of the board of directors of the Company above was resolved in the manner described in “(VIII)
Receipt of unanimous approval of all disinterested directors of the Company and the opinion of all disinterested auditorsof the Company that they have no objection” of “(6) Measures to ensure the fairness of the Tender Offer, such asmeasures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest” below.
(2) Grounds and reasons for the opinion on the Tender Offer
Among the grounds and reasons for the Company’s opinion on the Tender Offer below, the statements on the Offeror
Related Parties are based on the explanations of the Offeror Related Parties.
(I) Outline of the Tender Offer
As of today, of the Company Shares listed on the Prime Market of Tokyo Stock Exchange, Inc. (the “TSE”), theOfferor owns 2,110,000 shares (Shareholding Ratio: 2.11%).

As descried in the “Notice Regarding Planned

Commencement of Tender Offer for Shares of Lawson, Inc. (Securities Code: 2651) and the Execution of the Capitaland Business Alliance Agreement” released on February 6, 2024 (including amendments thereafter), the Offeror hasentered into the Master Agreement and the shareholders agreement (the “Shareholders Agreement”; the Master
Agreement, the Shareholders Agreement, and the Capital and Business Alliance Agreement hereinafter collectively
referred to as the “Definitive Agreements”) with MC, the parent company of the Company (number of shares held:
50,150,100 shares, Shareholding Ratio: 50.06%) as of February 6, 2024, and decided to execute a series of transactions(together with the Capital and Business Alliance Agreement, the “Transactions”) in order to ensure that the Company’s
shareholders are solely the Offeror Related Parties, by acquiring all of the Company Shares (including the Company
Shares related to such American Depositary Shares represented by the American Depositary Receipts; however,excluding Company Shares owned by the Offeror Related Parties and the treasury shares owned by the Company) and
Share Options (the Company Shares and the Share Options are collectively referred to as the “Company’s Share
Certificates”). In addition, the Capital and Business Alliance Agreement has been executed as of February 6, 2024,
between the Offeror Related Parties, and the Company. For details of the Capital and Business Alliance Agreement,
please refer to “(1) Capital and Business Alliance Agreement” under “4. Tendering shares by the Company’s
shareholders in the Tender Offer and other material agreements relating to the Tender Offer” below.
The Offeror intended to conduct the Tender Offer as part of the Transactions provided that the Competition Law

7

Procedures are completed and the other Conditions Precedent are satisfied (or waived by the Offeror Related Parties).
The Offeror has set the minimum number of tendered shares to be purchased in the Tender Offer at 14,458,500 shares(Shareholding Ratio: 14.43%); and if the total number of the Company’s Share Certificates tendered in the Tender Offer(the “Tendered Shares”) is less than the minimum number of tendered shares to be purchased, the Offeror will purchasenone of the Tendered Shares. Meanwhile, with the Offeror’s intention of having the Company Shares go private, theOfferor has not set the maximum number of tendered shares to be purchased in the Tender Offer; and if the total numberof the Tendered Shares is not less than the minimum number of tendered shares to be purchased, the Offeror willpurchase all of the Tendered Shares. The minimum number of tendered shares to be purchased (14,458,500 shares)
has been set so that upon the completion of the Tender Offer, the total number of voting rights of the Company held by
the Offeror Related Parties should be two-thirds (2/3) or more of the total number of voting rights of the Company (thenumber of voting rights of the Company, 1,000,779, in respect of the number of shares (100,077,915 shares) which isthe number of shares calculated by deducting the number of treasury shares held by the Company as of February 29,
2024, as reported by the Company’ (222,085 shares) from the total number of issued shares (100,300,000 shares) as ofJanuary 12, 2024 as stated in the Company’s Third Quarterly Report).
With respect to the number of Company Shares (106,000 shares) to be issued upon exercise of the Share Options,
given that (i) the Share Option Holders may exercise such holder’s Share Options only in a lump sum, within theexercise period of the Share Options which is limited to the 10-day period (or the following business day if the 10th day
falls on a holiday) from the date following the date on which such Share Option Holder has lost his/her/their position
as the Company’s director and executive officer (the exercise conditions associated with the loss of status hereinaftercollectively referred to as the “Forfeiture of Status Exercise Conditions”), and among the Company’s current 5 directors
and the current 13 executive officers who are the Share Option Holders, there is no person who plans to exercise theShare Options by fulfilling the Forfeiture of Status Exercise Conditions and it is not assumed that the Share Options
will be exercised and Company Shares will be issued or transferred to the Share Option Holders during the period fora tender offer in the Tender Offer (the “Tender Offer Period”); and (ii) as stated in “(5) Policies on organizational
restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)” below, when the Tender Offer iscompleted, the Offeror Related Parties plan to request the Company to carry out the procedures reasonably necessary
for the execution of the Transactions, such as encouraging the Share Option Holders to forfeit their Share Options. If
the Company receives such a request, it intends to cooperate with it promptly after the settlement commencement dateof the Tender Offer. As such, the Offeror does not take into account the number of Company Shares (106,000 shares)
to be issued upon exercise of the Share Options when setting the minimum number of tendered shares to be purchased.
In addition, as the Offeror aims to make the Offeror Related Parties the sole shareholders of the Company as set forth
above, if, upon the completion of the Tender Offer, in the event the Offeror Related Parties fails to acquire all of theCompany’s Share Certificates in the Tender Offer, the Offeror Related Parties plans, as described in “(5) Policies onorganizational restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)” below, toimplement a series of procedures to make the Offeror Related Parties the Company’s only shareholders (the “Squeezeout Procedure”). The Offeror plans to fund the Transactions, including the Tender Offer, by borrowing funds fromMUFG Bank, Ltd. (the “Bank Loan”) and to obtain the Bank Loan by the business day immediately preceding thecommencement date of the settlement concerning the Tender Offer.
The Offeror plans to conduct each of the transactions as substantially described below as the Transactions.
I. Prior to the implementation of the Tender Offer (current status)8As of today, MC owns 50,150,100 Company Shares (Shareholding Ratio: 50.06%), the Offeror owns 2,110,000
Company Shares (Shareholding Ratio: 2.11%), and other minority shareholders own 47,817,815 Company Shares(Shareholding Ratio: 47.73%) and 1,060 Share Options (106,000 Company Shares to be issued upon exercise of the
Share Options (Shareholding Ratio: 0.11%)).
MC

Other shareholders and the Share

OfferorOption Holders

50.06%

2.11%

47.84%

Company

II. Tender Offer
The Offeror will conduct the Tender Offer with the aim of acquiring all of the Company’s Share Certificates with the
purpose of having the Company Shares go private.

Tender Offer
MCOther shareholders and the Share
Option Holders

Offeror50.06%

2.11%

47.84%

Company

III. Squeeze-out Procedure through Share Consolidation (upon the completion of the Tender Offer)
In the event the Offeror fails to acquire all of the Company’s Share Certificates in the Tender Offer, the Offeror,
together with MC, shall request the Company to implement the procedures for the Share Consolidation (as defined in“(5) Policies on organizational restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)”
below; hereinafter the same), subject to the completion of Tender Offer and the completion of the settlement thereof,

9and the Company shall implement the procedures to make the Company’s shareholders solely the Offeror Related
Parties. With respect to the ratio of the Share Consolidation, the Offeror, together with MC, plans to request theCompany to set the ratio of the Share Consolidation to a ratio where the total number of issued shares of the Company
is two shares (however, if, as a result of discussions between the Offeror Related Parties, the Offeror Related Parties
agree to a different ratio, such different ratio) (the “Consolidation Ratio”) (if a different ratio is set, such ratio will bepromptly disclosed). In addition, if any fractional shares (including fractional shares resulting from the Company
Shares owned by MC) result from the implementation of the Share Consolidation, the Offeror plans to purchase theCompany Shares equivalent to the total number of such fractional shares (any fractional shares less than one shareresulting from the aggregation of fractional shares shall be discarded; hereinafter the same) in accordance with theprocedures provided in Article 235 of the Companies Act (Act No. 86 of 2005, as amended; the “Companies Act”) andother relevant laws and regulations.

Squeeze-out through the Share
Consolidation
MC

Other shareholders and the Share

OfferorOption Holders

100- (α+50.06) %50.06%α%Company

IV. After the implementation of the Transactions
After completion of the Squeeze-out Procedure, MC and the Offeror each plan to hold 50.00% of the voting rights in
the Company.

MC

Offeror50.00%

50.00%

Company10As of today, the Company Shares are listed on the TSE Prime Market. However, as described in “(4) Possibility ofdelisting and reason therefor” below, depending on the outcome of the Tender Offer, the Company Shares may
become delisted through the prescribed procedures. If the Squeeze-out Procedure is to be implemented after theTender Offer is completed, the Company Shares will be delisted through the prescribed procedures.
The Company resolved at its board of directors meeting of the Company held on February 6, 2024, as theCompany’s opinion as of the same day, to the effect that, if the Tender Offer is commenced, it shall express its opinion
in favor of the Tender Offer and recommend that the Company’s shareholders tender their shares in the Tender Offer,that it recommends that the owners of the American Depositary Receipts tender in the Tender Offer by delivering
their American Depositary Receipts to the Depositary Bank in advance and receiving delivery of the Company Shares
related to American Depositary Shares represented on the American Depositary Receipts, and that it leaves thedecision to the Share Option Holders whether or not to tender in the Tender Offer.
The aforementioned board of directors meeting resolved the following procedures for expressing the Company’s
opinion. That is, as described in “(II) Establishment of independent special committee at the Company andprocurement of a report from the special committee” of “(6) Measures to ensure the fairness of the Tender Offer, suchas measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest” below, theboard of directors meeting resolved to, when the Tender Offer is commenced, request the Special Committee
established by the Company in relation to the Tender Offer to consider whether or not the opinion expressed by theSpecial Committee to the board of directors of the Company as of February 5, 2024 has changed, and if it has not, toinform the board of the directors of the Company to that effect, and if it has changed, to state its changed opinion, andbased on such opinion of the Special Committee, the board of directors of the Company will restate its opinion on theTender Offer when the Tender Offer is commenced.
Subsequently, on February 21, 2024, the Company was informed by the Offeror that it expected that theCompetition Law Procedures will be completed by late March 2024, and assuming such expectation, it expected theTender Offer to be commenced on March 28, 2024. Further, on March 22, 2024, the Company was informed by theOfferor that, as the Competition Law Procedures have been completed, the Offeror intends to commence the Tender
offer on March 28, 2024, subject to the satisfaction of the Conditions Precedent.
In response to this, on March 25, 2024, the Company requested the Special Committee to consider whether or not
the opinion expressed by the Special Committee to the board of directors of the Company as of February 5, 2024 haschanged, and if it has not, to inform the board of the directors of the Company to that effect, and if it has changed, tostate its changed opinion, and received on March 26, 2024 the submission of the Report dated March 26, 2024 statingthat the Special Committee does not consider any change is necessary to the content of the report submitted by theSpecial Committee to the board of directors meeting dated February 5, 2024. Accordingly, the Company again
carefully discussed and considered the contents of the terms and conditions of the Tender Offer in light of the contentsof the Report dated March 26, 2024 as well as the Company’s business performance and changes in the market
environment, etc. since the board of directors meeting on February 6, 2024.
As a result, the Company still believes as of today that the Transactions will contribute to the enhancement of theCompany’s corporate value, and the purpose of the Transactions and the meaning and necessity of achieving such
purpose have only been enhanced and never decreased, and that there are no factors that would change the Company’s
decision about the Tender Offer as of February 6, 2024. Therefore, the Company again resolved at its board of
directors meeting held today, that it shall express its opinion in favor of the Tender Offer and recommend that theCompany’s shareholders tender their shares in the Tender Offer, that it recommends that the owners of the American11

Depositary Receipts tender in the Tender Offer after delivering their American Depositary Receipts to the Depositary
Bank in advance and receiving delivery of the Company Shares related to American Depositary Shares represented
on the American Depositary Receipts, and that it leaves the decision to the Share Option Holders whether or not totender in the Tender Offer.
For details regarding the decision-making process of the Company’s board of directors, please refer to “(IV)
Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by the Company” below.
(II) Background, purposes and decision-making process leading to the Offeror Related Parties’ decision to conduct theTender Offer
The Offeror was established in 2000 as DDI Corporation as a result of the merger of three companies (Kokusai Denshin
Denwa Co., Ltd. (KDD), which was established in 1953, DDI Corporation (DDI), which was established in 1984 andchanged its trade name in 1985, and IDO Corporation (IDO), which was established in 1987,) with DDI as the surviving
corporation, with the purpose of further enriching customers’ lives, business, and communications through“communication”.

Subsequently, through the absorption-type mergers, etc., of mobile communication service

companies consisting of seven cellular group companies and three TU-KA group companies, and POWEREDCOM,
Inc., which is an electric power communication service provider, the Offeror has provided various services to its
customers as a comprehensive communication service provider that can provide mobile and Fixed Broadband(FTTH/CATV) Service (Note 1) by a single company. DDI listed its shares on the TSE in 1993 and changed its tradename to KDDI Corporation in 2001.
(Note 1) “Fixed Broadband (FTTH/CATV) Service” means communication services that could send andreceive large-capacity data at a high speed. Those using optical fibers are referred to as “FTTH”
and those using cable TV lines are referred to as “CATV.”
Currently, the Offeror Group (which refers to a corporate group consisting of the Offeror, its 189 consolidated
subsidiaries, and its 43 affiliated companies subject to equity method (as of September 30, 2023)) is expanding its
business into various fields, with the provision of telecommunication services to individuals and corporate customers inJapan and overseas as its core business. In May 2022, the Offeror Group announced “KDDI VISION 2030: The
creation of a society in which anyone can make their dreams a reality, by enhancing the power to connect,” anddetermined that it would aim to become a presence that can provide added value in all industries and life scenes, andbecome a “Platformer to Support Society”. In addition, the New Medium-Term Business Strategy (from the fiscal year
ending March 2023 through the fiscal year ending March 2025) is built upon “sustainability management” that aims toachieve the sustainable growth of society and the enhancement of corporate value together with its partners, and theOfferor Group aims for an era in which new value is created, by evolving the “power to connect” through the use of 5G’s
characteristics and blending telecommunications into every kind of scene. In particular, the Offeror Group has set out a“Satellite Growth Strategy” as its business strategy and defined DX, finance, energy, LX, and regional co-creation as its
five focused areas, and is accelerating the expansion of new business domains by evolving the Offeror Group’s 5G
telecommunications business and its businesses in focus areas centered on telecommunications.
On the other hand, the Company was incorporated in April 1975 as Daiei Lawson Co., Ltd. and changed its trade nameto Lawson, Inc. in June 1996. Subsequently, the Company listed its shares on the First Section of the TSE Market in
July 2000; and in April 2022, the Company moved to the Prime Market in accordance with the review of the market
classification of the TSE. Currently, the Company Group (referring to a corporate group consisting of the Company,

12

30 consolidated subsidiaries, and 9 equity method affiliates (as of November 30, 2023)) operates a franchising system
for the convenience stores “LAWSON” and directly managed stores as its main business.
Since entering into a business alliance agreement (as amended. The same as below.) with MC in February 2000, theCompany has pursued mutual business synergies with MC and established its position as one of Japan’s leading
convenience store chains. In addition, the Company has aimed to realize the group philosophy of “Creating Happinessand Harmony in Our Communities” in the medium-term management vision “Challenge 2025” formulated in FY 2021
in preparation for 2025, the 50th anniversary of the Company’s incorporation, focusing its efforts on creating “new hubsof refreshment in every community” (Note 2), and carried out various initiatives centered on “Superior taste”, “Humankindness”, and “Environmental (Machi) friendliness”.
(Note 2)

“New hubs of refreshment in every community” refers to an ideal store model that the Company
is aiming for, which is a store that brings ease, excitement and convenience to daily life and is aplace where everyone can “refresh.”

The following are the main lines of business of the Lawson Group and the medium- to long-term management strategies
for each line of business:
A. Domestic convenience store business
The Company operates a franchising system and directly managed stores as the headquarter of the “LAWSON,”“NATURAL LAWSON” and “LAWSON STORE 100” chains in Japan as a domestic convenience store
business. Lawson urbanworks, Inc., a Company’s consolidated subsidiary, operates “LAWSON” convenience
stores mainly in Tokyo and Chiba prefecture, while Lawson Store 100, Inc., another Company’s consolidated
subsidiary, operates directly managed “LAWSON STORE 100” stores and provides management support, andSCI, Inc. a Company’s consolidated subsidiary, streamlines and optimizes the entire process as a functional
subsidiary that comprehensively manages the entire process from procurement of raw materials to sales.
In the midst of the COVID-19 pandemic, which caused a drastic change in consumer behavior, the Company
strengthened daily-use products such as fresh foods and frozen foods to meet consumers’ shut-in demand, andin the current phase where demand for going out is increasing as a result of the recovery of flow of people, theCompany is responding to this change in consumer behavior more than ever, and keeps innovating its products
and creating customer-friendly store displays. Furthermore, based on the utilization of digital technology
including the use of data within the Lawson Group, job satisfaction of colleagues, and the challenging spirit, theCompany is pursuing its “three promises” (Note 3) and accelerating its transformation to realize “new hubs ofrefreshment in every community” that can offer future new conveniences.

In order to accelerate these

initiatives under the strategic concept of “community-based x individual customer and individual-store focused”(Note 4), the Company has expanded the area company system (Note 5) across Japan from fiscal 2023, which
was partially introduced in fiscal 2022.
In addition, the Company has positioned the domestic convenience store business as a core business in its
business portfolio strategy, and intends to continue to strengthen the business through concentrating investmentin the business, while accelerating the evolution of the convenience store business, including its peripheralbusinesses, to practice “new convenience” and create a sustainable business model. The Company is working
to realize the world’s fastest quick commerce as its most recent major efforts such as integrating systems withdelivery platform companies and expanding the range of products that can be delivered.
(Note 3)“Three promises” refer to the “Superior taste,” “Human kindness,” and “Environmental (Machi)
friendliness” that the Company promises to its customers and society.

(Note 4)

“Community-based x individual customer and individual-store focused” refers to aiming to13

develop optimal products that meet the needs of customers in each region.
(Note 5)

“Area company system” refers to a system designed to fully pursue the creation of customer value
at sites close to customers through establishment of companies with considerable discretion in eightareas throughout Japan in order to realize the “community-based x individual customer andindividual-store focused.”

B. Seijo Ishii business
The Company operates the business with a focus on the operation of 181 directly managed “Seijo Ishii”
supermarket stores (as of the end of November 2023) and its franchising system through SEIJO ISHII CO.,LTD, a Company’s consolidated subsidiary. It has established its own unique business model of “vertical
integration of food,” in which all of its processes, from importing, logistics, manufacturing, wholesaling, retailsales, and restaurant operations, are carried out within the Company. With its good brand strength backed byhigh-quality products and services, it has successfully captured a shut-in demand during the COVID-19
pandemic and has achieved rapid expansion of its business scale.
Taking advantage of the greatly enhanced manufacturing capacity resulting from the start of operation of thenew, integrated central kitchen, “Yamato No. 3 central kitchen,” in July 2022, it currently intends to establish a
new logistics center to build a logistics system in preparation for penetrating and expanding into the westernparts of Japan in addition to promoting development of new category products in the deli division andaccelerating store openings in the Kanto area. In the e-commerce business, the Company has jointly operated
Seijo-Ishii Net Super on Amazon.co.jp since March 2022, and is working on strengthening e-commerce andpromoting last-mile business initiatives.
C. Entertainment-related business
The Company operates, through Lawson Entertainment, Inc., a Company’s consolidated subsidiary, ticket
business including Lawson Ticket and Lawson Travel, merchandise sales business that sells music and visualsoftware at HMV stores and via e-commerce, etc. It also operates cinema complex business that operates 41
cinema complexes (as of the end of December 2023) through United Cinemas Co., Ltd., a Company’s
consolidated subsidiary.
In its business portfolio strategy, the Company has positioned this business as one of the main revenue streams
in 2025, and is working on developing services which seamlessly provide both entertainment tickets and travel
tickets, launching a vertical travel business that considers utilizing M&A and alliances, and developing new
products and expanding product lineup in the e-commerce business, as well as evolving the cinema complex
business into entertainment complex business through adding more value to theater facilities such as premium
seating and expanding screening contents other than movies. Through these efforts, the Company aims to bea unique comprehensive entertainment distribution company.
D. Financial services business
The Company operates ATM business which has as its foundation 13,509 ATMs installed in Lawson stores
across Japan (as of the end of March 2023) as well as operates retail business through Lawson Bank, Inc, aCompany’s consolidated subsidiary. In addition to these businesses, the Company also provides services,
through its ATM network, to connect ATM users with partner financial institutions (385 partner financial
institutions as of the end of March 2023) and cashless operating companies.
In its business portfolio strategy, the Company has positioned this business as one of the main revenue streams

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in 2025, and is working to increase the number of ATM users by increasing its partner financial institutions andexpanding the services of Lawson Bank ATMs. The Company is also aiming to provide new retail financial
services as the “bank closest to customers” to customers of the stores which are more than 3.6 billion annually.
E. Overseas Business
The Company has overseas operations in China, Thailand, the Philippines, Indonesia, and the State of Hawaii
in the U.S. where the operating companies in the respective regions operate “LAWSON” stores (Note 6).
(Note 6)

In China, Thailand, the Philippines, and the State of Hawaii in the U.S., the Company mainly
operates the business through subsidiaries based on its investment in such companies, while inIndonesia, the Company does not operate the business through subsidiaries, but operates afranchising business through area licenses granted to local companies.

In China, which is the largest of the Company’s overseas operations in terms of business scale and a main sourceof overseas operating revenue, in addition to store openings by the Company’s Chinese subsidiaries, it is opening
stores in Shanghai, Chongqing, Shenyang, Beijing, and other cities under mega-franchise agreements with local
retailers, as well as under area license agreements under which local partner companies having headquartersfunctions are responsible for overall operation and development of stores in designated areas, thereby
accelerating the expansion of the areas to open stores and the number of stores. In particular, the number ofstores in China surpassed the 6,000-mark in August 2023, reaching 6,251 stores as of the end of November 2023
(a net increase of 631 stores on a year-on-year basis). In China, the Company has set a target of opening 10,000
stores by fiscal 2025, and is working to achieve this target by accelerating the opening of stores in new areas
and expanding the scale in the existing areas, as well as by strengthening product strategies, such as improving
private brand, and delivery, OMO (Note 7) and e-commerce. In the future, the Company may consider various
options for business strategies and capital-structure policies to accelerate the growth of its Chinese subsidiaries,
including alliances with business partners, accepting external capital, listing of shares, business restructuring,and reorganization, taking into account the business conditions and geopolitical risks in China. No decisions,however, have been made as of the date hereof. As for other regions, the Company operates 964 stores inThailand, the Philippines, Indonesia, and the State of Hawaii in the U.S. as of the end of November 2023. In
Southeast Asia, where economic growth is remarkable, demand for convenience stores is steadily increasing
due to the expansion of the middle class and the Company is striving to expand the scale of the business with aCompany of opening 3,000 stores by fiscal 2025. For further acceleration of store openings, in addition toinitiatives including alliances with leading local companies, the Company is promoting full-scale businessdevelopment through franchising, and opening stores in various formats and locations in the Philippines, andpromoting expansion of store opening areas in major cities other than Jakarta in Indonesia. In addition, theCompany intends to improve its product appeal such as expanding the product line under its private brand andcounter fast food, and improving its vendor policy.
(Note 7)“OMO” is an abbreviation for “online merges with offline” and refers to initiatives to motivate
consumers to make purchases by removing the distinction between sales via the Internet (ecommerce) and sales at physical stores.

In order to achieve “Challenge 2025,” a Company’s medium-term management plan for fiscal 2021 through fiscal 2025,
which was formulated in preparation for 2025, the 50th anniversary of the Company’s foundation, the Lawson Grouplaunched the “Lawson Group Sweeping Transformation Executive Committee” in September 2020 to discuss concrete

15

growth strategies for the entire Lawson Group in light of the ongoing changes in consumers’ lifestyles and values dueto the effects of COVID-19 that spread worldwide. Under the committee, the Company is taking on certain challenges
including providing new conveniences and improving job satisfaction of employees and store crews. The Company
also aims to achieve its challenge 2025 performance indicators (ROE of 15% or higher and EPS of 500 yen or higher)
through “enhancement of the Company’s corporate value,” “balancing investment for growth and shareholder returns,”
and “growth of individual group companies and the entire Lawson Group” driven by concentrated investment in the
Company’s core domestic convenience store business. The Company plans to achieve these challenge performanceindicators two years ahead of the schedule from fiscal 2025.
Under these circumstances, the environment surrounding the retail industry to which the Company belongs is in a phase
where various costs, including raw material costs, labor costs, and distribution costs, are expected to rise, in addition to
an increasingly competitive environment across industries and diversifying consumer needs. The Company believes
that the challenges to achievement of sustainable growth under such difficult circumstances are that each business in the
Lawson Group provides high value-added products and services, pursues further scale expansion and efficiency, anddeepens their DX to achieve these. In response to the growing demand for a sustainable society and the intensifying
environmental changes such as climate change, which is one of the social issues, the Company has formulated its
Environmental Vision, “Lawson Blue Challenge 2050!” (Note 8) to contribute to the formation of a decarbonized society
and to SDGs through decarbonizing activities, reduction in food waste and in use of plastic, and the Company recognizes
the intensifying environmental changes including climate change as a business challenge that must be addressed withpriority.
(Note 8)“Lawson Blue Challenge 2050!” is the Company’s Environmental Vision formulated in 2019 to focus
its efforts, in particular, on (1) reducing CO2 emissions, (2) reducing food waste, and (3) reducing useof plastic (containers and shopping bags).

The Offeror and the Company executed a capital and business alliance agreement in December 2019 with the purposeof promoting data marketing that leverages the customer bases of both companies and of creating new consumer
experiences through the utilization of cutting-edge technologies. Through measures such as collaborations of points,
they have worked, among others, to expand their customer bases and enhance services for their members. In addition,
in June 2022, the Offeror executed a business alliance agreement with the Company, MC, and menu, Inc., a company of
the Offeror Group, and has been expanding the delivery business, that is one of the new consumer experiences atconvenience stores.
In promoting such alliances, in late May 2023, the Offeror received a proposal from MC, the parent company of theCompany, to conduct a joint consideration on collaboration including the privatization of the Company Shares by thethree companies, i.e., the Offeror Related Parties and third party that was initially considering participating in theTransactions (the “Initial Partner Candidate”), with the Offeror and the Initial Partner Candidate as the new partnercandidates of the Company who can mutually utilize their own real store network and customer bases and support the
expansion and functional improvement of the Company’s network of real stores across Japan, and expansion of functionsin the digital area, including utilization for the Company’s digital marketing, (hereinafter the transaction toward theprivatization of the Company Shares by the Offeror Related Parties and the Initial Partner Candidate mentioned above
is referred to as the “Transactions (Initial Proposal)”). However, as described below, the Initial Partner Candidate
declined the proposal to the Transactions (Initial Proposal) during the Transactions (Initial Proposal) review process.
According to MC, MC was incorporated on April 1, 1950, and listed its shares on the TSE and Osaka Exchange, Inc.
in 1954. According to MC, MC comprises a corporate group consisting of 1,367 consolidated subsidiaries and 410

16

equity method affiliates (as of September 30, 2023) including MC and the Company (“MC Group”). MC has indicatedthat through its domestic and overseas network, MC operates in a wide range of industries in ten groups: natural gas,industrial materials, chemicals solution, mineral resources, industrial infrastructure, automotive & mobility, food industry,
consumer industry, power solutions, and urban development, as well as the industry digital transformation group andnext-generation energy business group. According to MC, in addition to trading, MC also plays a role in development,
production, and manufacturing at sites around the world with various partners.
According to MC, MC has formulated the “Midterm Corporate Strategy 2024” for three years starting from FY 2022
in May 2022, which aims for the continuous creation of MC Shared Value by elevating the MC Group’s collective
capabilities in order to address societal challenges, with “fostering and leveraging connections” of diverse businesses,
intelligence, human resources, and stakeholders as the keywords.

In particular, according to MC, the Consumer

Industry Group aims to provide consumers with highly attractive consumption experiences and highly convenientservices by collaborating with other industries, streamlining the supply chain through DX, and providing products,
services, and information that meet consumer needs through digital marketing by leveraging MC’s far-reaching
operations (contacts) with a wide range of consumers (customers) across real world and digital technology fields, basedon the mission of “Creating a rich life by connecting consumers and producers as well as the real world and digitaltechnology fields.” According to MC, in this context, the real store network centered on the Company and far-reaching
operations of digital services centered on Ponta are sources of value creation within the Consumer Industry Group; andsince the execution of a business alliance agreement between the Company and MC in February 2000, the Company has
been responsible for the most important business in the downstream business area of the MC Group.
With respect to capital relationships between MC and the Company, MC Retail Investment Co., Ltd. (“MCRI”), a
wholly-owned subsidiary of MC, acquired 9,109,300 Company Shares (7.93% of the issued shares at that time) in
February 2001, and a further 22,980,000 shares (21.36% of the issued shares at that time) in August 2001 (resulting in
the aggregate holding of 32,089,300 shares, including the 9,109,300 shares acquired previously, accounting for 29.82%
of the issued shares at that time), becoming the Company’s largest shareholder. MC has indicated that in December
2004, MC purchased all of these Company Shares from MCRI, and became the Company’s largest shareholder.
According to MC, through market purchase thereafter and though the Company a consolidated subsidiary in February
2017, MC has been operating the Company’s business together with the Company for nearly a quarter of a century.
According to MC, as a result of the above, MC owns 50,150,100 Company Shares (Shareholding Ratio: 50.06%) as oftoday.
According to MC, MC recognizes that the Company, which continues to provide value to approximately 10 million
customers per day using a network of approximately 14,600 stores across Japan, is a rare entity that possesses criticalinfrastructure functions that are indispensable to local customers. In addition, MC has expressed that it realizes that theCompany’s business, which is a “hub of refreshment in every community,” has been established through the efforts ofmany people, including franchisees and crews who support the Company’s business operations, employees of theCompany Group, and those who are engaged in logistics, vendor business, etc. According to MC, MC believes that
extensive contact with consumers and the customer base of the Company’s business, which is essential to customers inthis way, are valuable business resources that can serve as the foundation for the MC Group to develop new businessconcepts in downstream fields. According to MC, MC will continue to seek to provide services that are convenientand profitable for consumers, create new customer experiences, and support prosperous local communities, including
the possibility of collaboration between the Company’s business and the financial, advertising, and healthcare businesses
operated by the MC Group and in the urban development, electric power, mobility, and energy fields.
On the other hand, according to MC, as it internally considered measures to contribute to further enhancing theCompany’s corporate value, it had come to the conclusion by mid-May 2023 that as the environment surrounding the17retail business is expected to change, including advances in digital technology, diversification of consumer needs, future
population decline, and intensifying competition, including in other industries, based on the recognition that providing
services that integrate the real and digital more than ever will lead to consumer value, rather than stopping at the efforts
made by the Company Group or the support system for the Company by the MC Group, MC has come to believe thatcollaborating with new partners with a customer base and rich digital knowledge will contribute to further enhancing theCompany’s corporate value. According to MC, in parallel with these ongoing in-house consultations, MC had an
opportunity to conduct initial exchanges of views with the Offeror in order to consider a wide range of possibilities forfurther collaboration aimed at enhancing the Company’s corporate value, taking as an opportunity the entry into thecapital and business alliance agreement between the Offeror and the Company in December 2019.

In addition,according to MC, MC had been conducting initial exchanges of views with the Initial Partner Candidate in order toconsider the possibility of a partnership between the Initial Partner Candidate and the Company, since being approachedby the Initial Partner Candidate in late December 2022 regarding joint consideration of the possibility of collaboration
through a partnership with the Company.
According to MC, MC began approaching the Initial Partner Candidate and the Offeror in mid-May 2023 and in late
May 2023, respectively, to jointly consider a collaboration, including the privatization of the Company, given that,through these initial exchanges of views with the Offeror and the Initial Partner Candidate, MC confirmed that bothparties have a strong interest in business collaboration with the Company, and MC has come to believe that it can aim tobecome a familiar presence for all customers by combining the digital knowledge of the Offeror with the social
infrastructure centered on the “real world” sites owned by the Offeror and the Initial Partner Candidate, and that thesetwo companies could become new partner candidates for further enhancing the Company’s corporate value. Thereafter,
the Initial Partner Candidate indicated its willingness to consider the Transactions (Initial Proposal) in mid-May 2023,
and the Offeror indicated its intention to agree to proceed with the concrete examination of the Transactions (Initial
Proposal) in late June 2023, as described below. According to MC, MC intends to work together with the Offeror, withwhich MC has reached an agreement to implement the Transactions, to enhance the corporate value of the Company,
which will celebrate its 50th anniversary in 2025, and further to take on the challenge of realizing a “hub of refreshment
in every community” with a view to the next 50 years.
In response to this, the Offeror has repeatedly had initial discussions with MC regarding the significance of theTransactions (Initial Proposal) and the potential synergies with the Company. The Offeror believes that convenience
stores, which is the Company’s mainstay business, are an indispensable part of social infrastructures, and that theirimportance has been increasing in recent years. On the other hand, the Offeror believes that the diversification of
consumer values, including lifestyle and consumer behaviors, triggered by the spread of COVID-19, will necessitate theprovision of new values beyond real stores in the future. Under such business conditions, the Offeror recognizes that
the Company has developed distinctive stores, such as “LAWSON,” a convenience store with approximately 14,600
stores across Japan, “LAWSON STORE 100,” and “NATURAL LAWSON,” by adopting “community based ×
individual customer and individual store-focused” as a strategy and has established its position as one of the leading
convenience store chains in Japan through the provision of products and services closely tailored to local customers andthat it has a wide range of customer contact points, such as through Seijo Ishii, which is a supermarket with strong brandpower due to its high-quality original products, and the entertainment business, which sells tickets and operates movie
theaters, etc.
The Offeror recognizes that in order to continue to be an enterprise selected by customers in the future, while responding
to a declining domestic population and changes in the environment surrounding the communications industry,
maintaining and strengthening contact points with customers will be matters of even more importance for management

18

than ever before. The Offeror believes that collaborating with the Company will enable the Offeror to build contact
points with more customers and that by providing digital support for the Company through the utilization of various
assets, including communication systems owned by the Offeror Group, the Offeror will be able to improve theconvenience of the Company’s stores and provide new value to customers.
Based on this consideration, the Offeror has come to believe that meeting the needs of local communities and customers
by deepening alliances between the Company, which has close contacts with “real” customers, and the Offeror, which
has close contacts with “digital” customers, is also consistent with the Offeror’s aim to become a “Platformer to Support
Society.” Accordingly, in late June 2023, the Offeror has agreed to the proposal from MC and has started to specificallyexamine the Transactions (Initial Proposal).
Since late June 2023, the Offeror has continued discussions with MC on the transaction structures and management
policies for the Transactions (Initial Proposal) by the three companies, including the Initial Partner Candidate, throughexplanations regarding the Initial Partner Candidate from MC, and has also considered specific collaborative measureswith the Company in addition to deepening its understanding of the Company through explanations regarding theCompany from MC.
In late June 2023, the Offeror appointed Nishimura & Asahi (Gaikokuho Kyodo Jigyo) as a legal advisor independentof the Offeror Related Parties and the Company, and in early September 2023, it appointed UBS Securities Japan Co.,
Ltd. (“UBS Securities”) as a financial advisor independent of the Offeror Related Parties and the Company. In addition,in mid-May 2023, MC appointed Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. as a financial advisor independentof the Offeror Related Parties and the Company, and appointed Nagashima Ohno & Tsunematsu as a legal advisor
independent of the Offeror Related Parties and the Company. After that, the three companies, including the Initial
Partner Candidate, have held consultations on multiple occasions since late August 2023 on fundamental matters suchas the transaction structure and schedule, as well as specific measures to enhance the corporate value of the Company.
As a result, in late August 2023, the Offeror has come to share with MC and the Initial Partner Candidate the view that
the Company’s corporate value could be enhanced by utilizing the networking, management resources, and knowledge
possessed by the Offeror Related Parties, the Initial Partner Candidate, and the Company in their respective industries,
and by promoting their business activities based on mutual collaboration. Specifically, for the Company Group’sbusiness activities that support lives of individuals nationwide through the provision of food and daily necessities, byutilizing the knowledge of the Offeror Group, an infrastructure company with leading domestic shares in the field ofcommunications; and the Initial Partner Candidate, and by the Offeror Related Parties, the Initial Partner Candidate, andthe Company cooperating in each area of “real,” aiming to expand networks and enhance store functions through themutual utilization of real stores; “digital,” aiming to expand the points economic zone and develop real and digital
integrated services; and “green,” aiming to promote measures to reduce the environmental burden, the parties came tobelieve that they could contribute to enhancing the Company’s corporate value by creating value for consumers throughthe realization of a new business form that surpasses conventional convenience stores based on the concept of “real ×
digital × green.” In addition, with regard to the means to realize the above, the parties decided that it would be best to
take private the Company Shares, based on the view that accelerating the mutual utilization of management resources,
implementing various measures that lead to the growth of the Company over the medium to long term even if not directly
related to the short-term benefits of the Company, and building stronger alliances will ultimately contribute to theenhancement of the Company’s corporate value.
Based on the discussions as described above, the Offeror Related Parties and the Initial Partner Candidate provided an
initial proposal as of September 1, 2023, concerning the Transactions (Initial Proposal), to the Company, and in early
September 2023, the Company indicated its intention to establish a review system for discussions regarding the19Transactions (Initial Proposal). After that, since mid-September 2023, the Offeror Related Parties and the Initial Partner
Candidate have commenced consultations on specific matters with the Company toward the implementation of theTransactions (Initial Proposal). In addition, since mid-October 2023, the Offeror Related Parties and the Initial Partner
Candidate have consecutively commenced due diligence on the Company to deepen their understanding of the businessenvironment, growth strategies, management issue, etc., with respect to the Company and its business. At the sametime, they confirmed matters with respect to the fields of business, accounting, tax affairs, legal affairs, etc. of theCompany.
In such situation, in late December 2023, the Offeror Related Parties were consulted by the Initial Partner Candidate
regarding the impact on the Transactions (Initial Proposal) due to the circumstances of the Initial Partner Candidate.
After discussions between the Offeror Related Parties and the Initial Partner Candidate, the parties came to the conclusionthat it would be difficult to continue with the Transactions (Initial Proposal), and the Offeror Related Parties received anoffer concerning the declining of the Transactions (Initial Proposal) from the Initial Partner Candidate. Based on this,the Offeror Related Parties consulted again regarding the best way to enhance the Company’s corporate value. As aresult, the Offeror Related Parties reconfirmed their understanding that in order to enhance the corporate value of theOfferor Related Parties and the Company, it is essential to mutually leverage their respective management resources,
such as their respective human resources and know-how, etc., and to promote swift decision-making. On the other
hand, the Offeror Related Parties also confirmed that they are mutually aware of the issue that it is impossible to deny
the risk of a short-term downturn in business results due to a temporary increase in costs incurred as a result of taking
various measures and the possibility of the adverse effect on stock prices resulting from them. As a result, based on the
belief that taking private the Company Shares without impairing benefits of the Company’s minority shareholders byproviding the Company’s minority shareholders with appropriate and reasonable opportunities to sell the Company
Shares, taking various measures that lead to the growth of the Company over the medium to long term, even if suchmeasures may not be directly related to the short-term benefits of the Company, and building stronger alliances, will
ultimately contribute to the enhancement of the Company’s corporate value, the Offeror Related Parties have determinedthat taking private the Company Shares and putting the Company under a joint management structure by the Offeror
Related Parties is the best option for enhancing the corporate value of the Company.
After that, the Initial Partner Candidate officially provided the Company with a notice as of December 25, 2023
declining the proposal regarding the Transactions (Initial Proposal). In addition, as a result of consultation, the Offeror
Related Parties provided the Company with a written proposal as of December 26, 2023 for a change in the initial
proposal regarding the Transactions that changed the Transactions (Initial Proposal) from a collaboration involving theprivatization of the Company Shares by three companies (i.e., the Offeror Related Parties and the Initial Partner
Candidate) to a collaboration involving the privatization of the Company Shares by two companies (i.e., the Offeror
Related Parties).
In response to this, the Company and the Special Committee, on January 4, 2024, the Company and the Special
Committee held an interview session with the Offeror Related Parties to review the impact of the changes to the initial
proposal. In the interview, the Company and the Special Committee received an explanation from the Offeror that due
to the Initial Partner Candidate’s decline, the business alliance matters proposed by the Initial Partner Candidate will be
excluded from the scope of the proposal, but as the voting rights ratio of the Offeror after the Transactions will be raised
to 50.00%, with respect to the business alliance matters proposed by the Offeror, the Offeror will be able to give prompt
and generous support based on a stronger commitment; therefore, they believed that it would be worthwhile to deepen
consideration and discussions on the details of the proposed changes to the initial proposal, and decided to continue toconsider the Transactions.
The Offeror Related Parties expect synergies in each of the “real × digital × green” fields through the creation of new20

consumer value that combines “real × digital × green” and by making the Offeror Related Parties the Company’s only
shareholders through the Transactions and conducting business operations in an integrated manner with the Company,
and they are considering the following matters as measures to realize those synergies. Further, the Offeror Related
Parties may consider entering into an alliance with a new outside partner as a future option after the Transactions arecompleted in order for the Company to continue to grow sustainably in the future as well. However, as of today, no
consideration has been given to entering into an alliance with a specific outside partner, nor is there a specific policy for
inviting an outside partner.
(i)

Specific Measures and Synergies in Real Areas
The Offeror Related Parties believe it possible to build a leading domestic real store network regarding theOfferor’s and the Company’s approximately 16,800 real stores, which are the strengths of both the Company andthe Offeror (Company stores: approximately 14,600; au shops: approximately 2,200). On that basis, the Offeror
Related Parties expect to improve the Company’s competitive advantage by providing new services that utilize thefunctions and commodities of the Offeror Related Parties and the Company.
Specifically, as measures to expand the networks and strengthen the functions of the Company’s stores, theOfferor Related Parties are considering providing new services by combining the Offeror’s assets, such as thehandling of Company goods and services at au shops, the provision of commodities and services centered oncommunications of the Offeror at Company stores (such as merchandise-based communication services), and theprovision of services that are more in tune with customers’ lives through the introduction of online remote customer
service.

(ii) Specific Measures and Synergies in Digital Areas
The Offeror Related Parties expect that the Company will improve customer satisfaction and loyalty by utilizing
one of the largest customer database in Japan resulting from the shared member information (attributes, purchase
information, etc.) held by the Offeror Related Parties and the Company.
Specifically, the Offeror Related Parties are considering conducting new customer referrals to Company storesfrom the Offeror’s membership base and developing and offering new services for members aimed at expanding
use of Company stores by existing members of the Offeror and the Company. The Offeror Related Parties arealso considering establishing a data-sharing and analytical system with the Offeror to expand the Company’s
earnings, as well as utilizing the Offeror’s DX knowledge and technologies for Company store management issues,
such as optimized operation of Company stores.
(iii) Specific Measures and Synergies in Green Areas
By making maximum use of the business foundations of the Offeror Related Parties and the Company andpromoting initiatives to decarbonize the Company’s business, the Offeror Related Parties expect to realize a green
and sustainable society.
Specifically, the Offeror Related Parties are considering promoting the greening of Company stores by installing
solar panels at Company stores and having electricity be generated by the Offeror. In addition, the Offeror
Related Parties will consider promoting a circular economy business, such as manufacturing biodiesel whose raw
material is waste oil made by Company stores and contributing to achievement of “Lawson Blue Challenge 2050!”
introduced by the Company by replacing plastic containers and plastic bottle materials with bio-materials in
Company’s business.

21

In parallel, the Offeror and MC have repeatedly held consultations with the Company since mid-October 2023, on a
specific business alliance, such as the management structure and business policies following the completion of theTransactions.

After several rounds of negotiations, as of February 6, 2024, the Offeror Related Parties and theCompany executed the Capital and Business Alliance Agreement, and the Shareholders Agreement has been executed
among the Offeror Related Parties.

For a summary of the Capital and Business Alliance Agreement and theShareholders Agreement, refer to “(1) Capital and Business Alliance Agreement” and “(3) Shareholders Agreement”
under “4. Tendering shares by the Company’s shareholders in the Tender Offer and other material agreements relating to
the Tender Offer” below. In connection with the execution of the Capital and Business Alliance Agreement, it wasagreed that the business alliance agreement between MC and the Company on September 16, 2016 will be terminatedsubject to the effectiveness of the Capital and Business Alliance Agreement.
In addition, based on the results of due diligence on the Company conducted from mid-October 2023 to late January2024, with respect to the price of tender offer in the Tender Offer (the “Tender Offer Price”), the Offeror made an initial
proposal (the “Initial Proposal”) in writing to the Company on December 26, 2023, making the Tender Offer Price perCompany Share be 8,650 yen (8,650 yen is the amount calculated by adding an 18.64% premium to 7,291 yen, which
was the closing price of the Company Shares on the Prime Market of the TSE on December 25, 2023 (such date being
the business day immediately preceding December 26, 2023, when the proposal was made) (rounded to the second
decimal place; hereinafter the same applies in the calculation of the premium rate), an 18.98% premium to 7,270 yen,which was the simple average of the closing prices for the one month until the same date (rounded to the nearest whole
number; hereinafter the same applies in the calculation of the simple average of closing prices), a 21.80% premium to7,102 yen, which was the simple average of the closing prices for the three months until the same date, and a 23.64%
premium to 6,996 yen, which was the simple average of the closing prices for the six months until the same date), making
the price of tender offer per Share Option (the “Share Option Price”) be 1 yen, and making the Tender Offer Price perCompany Share relating to American Depositary Shares represented by American Depositary Receipts be 8,650 yen.
In response to the Initial Proposal, on December 27, 2023, the Offeror received a request from the Company to review
the Tender Offer Price from the perspective of considering the interests of the Company’s minority shareholders.
In response to such request from the Company, the Offeror made the second proposal (the “Second Proposal”) in writing
to the Company on January 4, 2024, making the Tender Offer Price per Company Share be 9,000 yen (9,000 yen is theamount calculated by adding a 23.58% premium to 7,283 yen, which was the closing price of the Company Shares on
the Prime Market of the TSE on December 29, 2023 (such date being the business day immediately preceding January
4, 2024, when the proposal was made), a 24.09% premium to 7,253 yen, which was the simple average of the closing
prices for the one month until the same date, a 26.32% premium to 7,125 yen, which was the simple average of theclosing prices for the three months until the same date, and a 28.13% premium to 7,024 yen, which was the simple
average of the closing prices for the six months until the same date), making the Share Option Price be 1 yen, and making
the Tender Offer Price per Company Share relating to American Depositary Shares represented by American Depositary
Receipts be 9,000 yen. In response to the Second Proposal, on January 6, 2024, the Offeror received a request from theCompany to review the Tender Offer Price again from the perspective of considering the interests of the Company’s
minority shareholders.
In response to such request from the Company, the Offeror made the third proposal (the “Third Proposal”) in writing
to the Company on January 11, 2024, making the Tender Offer Price per Company Share be 9,500 yen (9,500 yen is theamount calculated by adding a 29.85% premium to 7,316 yen, which was the closing price of the Company Shares on
the Prime Market of the TSE on January 10, 2024 (such date being the business day immediately preceding January 11,2024, when the proposal was made), a 31.51% premium to 7,224 yen, which was the simple average of the closing prices
for the one month until the same date, a 32.50% premium to 7,170 yen, which was the simple average of the closing

22

prices for the three months until the same date, and a 34.35% premium to 7,071 yen, which was the simple average ofthe closing prices for the six months until the same date), making the Share Option Price be 1 yen, and making the Tender
Offer Price per Company Share relating to American Depositary Shares represented by American Depositary Receipts
be 9,500 yen. In response to the Third Proposal, on January 12, 2024, the Offeror received a request from the Company
to review the Tender Offer Price again from the perspective of considering the interests of the Company’s minority
shareholders.
In response to such request from the Company, the Offeror made the fourth proposal (the “Fourth Proposal”) in writing
to the Company on January 18, 2024, making the Tender Offer Price per Company Share be 10,000 yen (10,000 yen is
the amount calculated by adding a 20.63% premium to 8,290 yen, which was the closing price of the Company Shareson the Prime Market of the TSE on January 17, 2024 (such date being the business day immediately preceding January
18, 2024, when the proposal was made), a 35.23% premium to 7,395 yen, which was the simple average of the closing
prices for the one month until the same date, a 37.76% premium to 7,259 yen, which was the simple average of theclosing prices for the three months until the same date, and a 40.61% premium to 7,112 yen, which was the simple
average of the closing prices for the six months until the same date), making the Share Option Price be 1 yen, and making
the Tender Offer Price per Company Share relating to American Depositary Shares represented by American Depositary
Receipts be 10,000 yen. In response to the Fourth Proposal, on January 24, 2024, the Offeror received a request fromthe Company to consider from the perspective of considering the interests of the Company’s minority shareholders
further increasing of the Tender Offer Price, in light of the growth in the current performance including the details of the“Consolidated Financial Results [IFRS] for the Third Quarter of the Fiscal Year Ending February 29, 2024” announced
by the Company on January 12, 2024 (the “Company’s Financial Results”) and the continuous rise in the current stock
price with a view to recommending support for and tender shares in the Transactions.
In response to such request from the Company, the Offeror made the fifth proposal (the “Fifth Proposal”) in writing to
the Company on January 26, 2024, making the Tender Offer Price per Company Share be 10,200 yen (10,200 yen is theamount calculated by adding a 23.40% premium to 8,266 yen, which was the closing price of the Company Shares on
the Prime Market of the TSE on January 25, 2024 (such date being the business day immediately preceding January 26,
2024, when the proposal was made), a 31.61% premium to 7,750 yen, which was the simple average of the closing prices
for the one month until the same date, a 37.99% premium to 7,392 yen, which was the simple average of the closing
prices for the three months until the same date, and a 42.04% premium to 7,181 yen, which was the simple average ofthe closing prices for the six months until the same date), making the Share Option Price be 1 yen, and making the Tender
Offer Price per Company Share relating to American Depositary Shares represented by American Depositary Receipts
be 10,200 yen. In response to the Fifth Proposal, on January 28, 2024, the Offeror received a request from the Company
to consider further increasing of the Tender Offer Price, with a view to recommending support for and tender shares in
the Transactions from the perspective of considering the interests of the Company’s minority shareholders.
In response to such request from the Company, the Offeror made the sixth proposal (the “Sixth Proposal”) in writing to
the Company on January 29, 2024, making the Tender Offer Price per Company Share be 10,290 yen (10,290 yen is theamount calculated by adding a 24.20% premium to 8,285 yen, which was the closing price of the Company Shares on
the Prime Market of the TSE on January 26, 2024 (such date being the business day immediately preceding January 29,
2024, when the proposal was made), a 31.91% premium to 7,801 yen, which was the simple average of the closing prices
for the one month until the same date, a 38.81% premium to 7,413 yen, which was the simple average of the closing
prices for the three months until the same date, and a 43.08% premium to 7,192 yen, which was the simple average ofthe closing prices for the six months until the same date), making the Share Option Price be 1 yen, and making the Tender
Offer Price per Company Share relating to American Depositary Shares represented by American Depositary Receipts
be 10,290 yen.

In response to the Sixth Proposal, on January 29, 2024, the Offeror received a request from the23Company to consider raising of the Tender Offer Price even more with a view to recommending support for and tendershares in the Transactions from the perspective of sufficiently considering the interests of the Company’s minority
shareholders.
In response to such request from the Company, the Offeror made the seventh proposal (the “Seventh Proposal”) in
writing to the Company on January 30, 2024, making the Tender Offer Price per Company Share be 10,350 yen (10,350
yen is the amount calculated by adding a 23.01% premium to 8,414 yen, which was the closing price of the Company
Shares on the Prime Market of the TSE on January 29, 2024 (such date being the business day immediately preceding
January 30, 2024, when the proposal was made), a 30.60% premium to 7,925 yen, which was the simple average of theclosing prices for the one month until the same date, a 39.19% premium to 7,436 yen, which was the simple average ofthe closing prices for the three months until the same date, and a 43.67% premium to 7,204 yen, which was the simple
average of the closing prices for the six months until the same date), making the Share Option Price be 1 yen, and making
the Tender Offer Price per Company Share relating to American Depositary Shares represented by American Depositary
Receipts be 10,350 yen. In response to the Seventh Proposal, on January 31, 2024, the Offeror received a request fromthe Company to consider raising of the Tender Offer Price even more with a view to recommending support for andtender shares in the Transactions from the perspective of sufficiently considering the interests of the Company’s minority
shareholders.
In response to such request from the Company, the Offeror made the final proposal (the “Final Proposal”) in writing to
the Company on January 31, 2024, making the Tender Offer Price per Company Share be 10,360 yen (10,360 yen is theamount calculated by adding a 23.00% premium to 8,423 yen, which was the closing price of the Company Shares on
the Prime Market of the TSE on January 30, 2024 (such date being the business day immediately preceding January 31,
2024, when the proposal was made), a 30.27% premium to 7,953 yen, which was the simple average of the closing prices
for the one month until the same date, a 38.89% premium to 7,459 yen, which was the simple average of the closing
prices for the three months until the same date, and a 43.61% premium to 7,214 yen, which was the simple average ofthe closing prices for the six months until the same date), set the Share Option Price be 1 yen, and making the Tender
Offer Price per Company Share relating to American Depositary Shares represented by American Depositary Receipts
be 10,360 yen. In response to the Final Proposal, on February 2, 2024, the Offeror received a response from theCompany that it considers the Tender Offer Price in the Final Proposal to be the maximum price that the Offeror canoffer, and that it will accept the Tender Offer Price in the Final Proposal.
As a consequence of the above, the Offeror and the Company agreed on February 2, 2024 to set the Tender Offer Price
per Company Share at 10,360 yen (10,360 yen is the amount calculated by adding a 19.99% premium to 8,634 yen,which was the closing price of the Company Shares on the Prime Market of the TSE on February 1, 2024 (such date
being the business day immediately preceding February 2, 2024, when the agreement was made), a 29.32% premium to
8,011 yen, which was the simple average of the closing prices for the one month until the same date, a 38.10% premium
to 7,502 yen, which was the simple average of the closing prices for the three months until the same date, and a 43.17%
premium to 7,236 yen, which was the simple average of the closing prices for the six months until the same date), set the
Share Option Price at 1 yen, and making the Tender Offer Price per Company Share relating to American Depositary
Shares represented by American Depositary Receipts at 10,360 yen. According to the Offeror, the Offeror and MC
also agreed on February 6, 2024 to set the Tender Offer Price per Company Share at 10,360 yen, set the Share Option
Price at 1 yen, and set the Tender Offer Price per Company Share relating to American Depositary Shares represented
by American Depositary Receipts at 10,360 yen.
Accordingly, the Tender Offeror entered into the Master Agreement on February 6, 2024 and, as it was expected that acertain period of time is necessary to complete the Competition Law Procedures, decided to conduct the Tender Offer as24part of the Transactions provided that the Conditions Precedent are satisfied (or waived by the Offeror Related Parties).
Subsequently, on February 21, 2024, the Company was informed by the Offeror that it expected that the Competition
Law Procedures will be completed by late March 2024, and assuming such expectation, it expected the Tender Offer tobe commenced on March 28, 2024. Further, on March 22, 2024, the Offeror informed the Company that, as theCompetition Law Procedures have been completed, the Offeror intends to commence the Tender Offer on March 28,
2024, subject to the satisfaction of the Conditions Precedent. The Offeror also received a report from the Company
today that, as of today, there are no undisclosed material facts concerning the Company’s businesses or undisclosed facts
relating to the implementation of tender offers, etc. concerning the Company’s Share Certificates.
Now that the Offeror has confirmed that all of the Conditions Precedent had been satisfied, the Offeror has decided
today to commence the Tender Offer on March 28, 2024.
(III) Management policy after the Tender Offer
After the Tender Offer is successfully completed, the Offeror Related Parties are scheduled to appoint persons
designated by them as officers of the Company with the aim of implementing measures to realize each effect describedin “(II) Background, purposes and decision-making process leading to the Offeror Related Parties’ decision to conduct
the Tender Offer” above and establishing an appropriate management structure for this purpose. However, the specificdetails of those measures, the specific time of appointment of those officers, and the candidates themselves have not yet
been determined. The detailed management structure of the Company, including these points, will be determined inconsultation with the Company after the Tender Offer is successfully completed.
The Offeror entered into the Shareholders Agreement with MC as of February 6, 2024, where they agreed that, as
directors of the Company after completion of the Transactions, MC and the Offeror will each appoint three directors, andMC and the Offeror will each appoint one representative director of the Company. For a summary of the Shareholders
Agreement, refer to “(3) Shareholders Agreement” under “4. Tendering shares by the Company’s shareholders in the Tender
Offer and other material agreements relating to the Tender Offer” below.
In addition, with regard to the Share Options, since the Share Option Price is 1 yen and as stated in “(5) Policies onorganizational restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)” below, in the eventthat the Tender Offer has been successfully completed but the Offeror Related Parties are unable to acquire all of the
Share Options in the Tender Offer and the Share Options are not exercised and remain outstanding, the Offeror Related
Parties plan to request that the Company implement reasonably necessary procedures for carrying out the Transactions,such as recommending that the Share Option Holders forfeit their Share Options. Therefore, in order not to harm theinterests of the Share Option Holders, the Offeror plans to make a determination regarding the introduction of a newretirement benefit system that provides economic benefits to be enjoyed by the Share Option Holders in consultation
with the Company and the Share Option Holders promptly after the settlement commencement date of the Tender Offer
after the Tender Offer has been successfully completed. The determination regarding such retirement benefit system,
which takes into account the fact that Share Options were granted as officers’ compensation equivalent to retirement
benefits and is intended to not harm the interests of the Share Option Holders, is planned to be made in consultation with
the Company and the Share Option Holders after the Tender Offer has been successfully completed, and is expected tobe made independent of the Share Option Holders tendering shares in the Tender Offer and without requiring that the
Share Option Holders tender their shares in the Tender Offer. Therefore, the Offeror believe that such retirement benefit
system is not contrary to the purport of the regulation on uniformity of the tender offer price.
(IV) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by the Company(i) Background of the proposal from the Offeror Related Parties and the establishment of the review system25

As described in “(II) Background, purposes and decision-making process leading to the Offeror Related Parties’ decision to
conduct the Tender Offer” above, on September 1, 2023, upon receiving the initial proposal on the Transactions (Initial Proposal),the Company appointed SMBC Nikko Securities Inc. (“SMBC Nikko Securities”) as a financial advisor and a third-party valuator
independent of the Offeror Related Parties and the Company with respect to the Transactions (Initial Proposal) after reviewing its
expertise and track record, etc. in order to receive advice and assistance from a financial perspective, including advice regarding
the valuation of the Company Shares and negotiation policies with the Offeror Related Parties, and the Company appointed
Anderson Mori & Tomotsune Gaikokuho Kyodo Jigyo (“Anderson Mori & Tomotsune”) as an external legal advisor after
reviewing its expertise and track record, etc. in order to receive legal advice, including advice on measures to be taken to ensure
the fairness of the procedures in the Transactions (Initial Proposal), various procedures of the Transactions (Initial Proposal), andthe decision-making method and process of the Company related to the Transactions (Initial Proposal). In light of the fact that
MC, the Offeror Related Party, holds 50,150,100 Company Shares (Shareholding Ratio: 50.06%) and is a parent company of theCompany, and thereby the Transactions (Initial Proposal), including the Tender Offer, may fall under a material transaction, etc.
with a controlling shareholder, which may have fallen under the category of transactions in which there are structural conflict ofinterest issue and information asymmetry issues, the board of directors of the Company has, based on the advice from Anderson
Mori & Tomotsune, in order to respond to the above issues and to ensure the fairness of the Transactions (Initial Proposal),
immediately started establishing a system to examine, negotiate, and make a decision related to the Transactions (Initial Proposal)
from a standpoint independent of the Offeror Related Parties with a view to improving the corporate value of the Company andprotecting the interests of the Company’s minority shareholders.
Specifically, as described in “(II) Establishment of independent special committee at the Company and procurement of a reportfrom the special committee” under “(6) Measures to ensure the fairness of the Tender Offer, such as measures to ensure thefairness of the Tender Offer Price and measures to avoid conflicts of interest” below, the Company has made preparations for theestablishment of the Special Committee consisting of the Company’s independent outside director and outside corporate auditor
from early September 2023. Then, by resolution of the Company’s board of directors meeting held on September 13, 2023, a
special committee (the “Special Committee”; For the background of the establishment, etc. of the Special Committee,
background of reviews, and details of decisions, etc., refer to “(II) Establishment of independent special committee at theCompany and procurement of a report from the special committee” under “(6) Measures to ensure the fairness of the Tender
Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest” below)
consisting of Ms. Miki Iwamura (an independent outside director of the Company), Ms. Satoko Suzuki (an independent outside
director of the Company), and Ms. Yuko Gomi (an independent outside corporate auditor of the Company) was established. In
addition, it was resolved that the Company will consult the Special Committee on (i) whether the purpose of the Transactions islegitimate and reasonable (including whether the Transactions will contribute to the enhancement of the Company’s corporate
value); (ii) whether the fairness and appropriateness of the terms and conditions of the Transactions (including the Tender Offer
Price) are ensured; (iii) whether sufficient consideration is given to the interests of the shareholders of the Company through fair
procedures in the Transactions; (iv) whether it can be considered appropriate for the Company’s board of directors to express its
opinion in favor of the Tender Offer, and recommend that the shareholders of the Company tender their shares in the Tender Offer,that it recommends that the owners of the American Depositary Receipts tender in the Tender Offer by delivering their American
Depositary Receipts to the Depositary Banks in advance and receiving delivery of the Company Shares related to the American
Depositary Shares represented by the relevant American Depositary Receipts, and that it leaves the decision to the Share Option
Holders whether or not to tender their shares in the Tender Offer and (v) in addition to (i) through (iv) above, the decision to enter
into the Transactions would not be disadvantageous to the minority shareholders of the Company (collectively, the “Matters for
Consultation”) (for the method of the resolution at the Company’s board of directors meeting, refer to “(VIII) Receipt of
unanimous approval of all disinterested directors of the Company and the opinion of all disinterested auditors of the Company
that they have no objection” under “(6) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness26

of the Tender Offer Price and measures to avoid conflicts of interest” below). As described in “(II) Establishment of independent
special committee at the Company and procurement of a report from the special committee” under “(6) Measures to ensure thefairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts ofinterest” below, the appointment of SMBC Nikko Securities as the Company’s financial advisor and third-party valuator, andAnderson Mori & Tomotsune as the Company’s legal advisor, has been approved by the Special Committee. In addition, as
described in “(II) Establishment of independent special committee at the Company and procurement of a report from the special
committee” under “(6) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender
Offer Price and measures to avoid conflicts of interest” below, based on the authority granted above, on September 13, 2023, theSpecial Committee appointed Nakamura, Tsunoda & Matsumoto as its Company’s independent legal advisor, and Daiwa
Securities Co. Ltd. (“Daiwa Securities”) as its independent financial advisor and a third-party valuator.
Furthermore, the Company has established a system within the Company to review, negotiate, and make decisions related to
the Transactions from a standpoint independent of the Offeror Related Parties (including the scope of the Company’s directors,
officers, and employees involved in the review, negotiation, and decisions related to the Transactions, and their duties), and theSpecial Committee has confirmed that there are no problems with the review system from the viewpoint of independence andfairness (for details of the review system, refer to “(VII) Establishment of independent review system at the Company” under“(6) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price andmeasures to avoid conflicts of interest” below).
(ii) Background of review and negotiation
The Company received a report from SMBC Nikko Securities regarding the valuation of the Company Shares, advice
regarding the negotiation policies with the Offeror, and legal advice from Anderson Mori & Tomotsune on various points suchas measures to ensure the fairness of the procedures in the Transactions. Based on such report and advice, the Company has
carefully considered the merits of the Transactions and the appropriateness of the terms and conditions of the Transactions,
including the Tender Offer Price.
On October 12, 2023, the Company held an interview to explain its corporate profile to the Offeror Related Parties and theInitial Partner Candidate, and since mid-October 2023, it has repeatedly held consultations and negotiations with the Offeror
Related Parties and the Initial Partner Candidate on the significance and purpose of the Transactions (Initial Proposal), themanagement and business operation plans after the Transactions (Initial Proposal). Specifically, on October 6, 2023, theCompany sent a questionnaire regarding the Transactions (Initial Proposal) to the Offeror Related Parties and the Initial Partner
Candidate, and on October 27, 2023, the Company received written responses to the questionnaire from the Offeror Related
Parties and the Initial Partner Candidate and on October 30, 2023, the Company confirmed the intent of the responses verbally.
Based on the responses received from the Offeror Related Parties and the Initial Partner Candidate, on November 28, 2023, theCompany again sent a questionnaire regarding the Transactions (Initial Proposal) to the Offeror Related Parties and the Initial
Partner Candidate. Upon receiving written responses to the questionnaire from the Offeror Related Parties and the Initial Partner
Candidate on December 4, 2023, the Company confirmed the intent of the responses verbally on December 13, 2023.
On November 17, 2023, the Special Committee also sent a questionnaire regarding the Transactions (Initial Proposal) to theOfferor Related Parties and the Initial Partner Candidate, and on December 4, 2023, the Company received written responses tothe questionnaire from the Offeror Related Parties and the Initial Partner Candidate and on December 7, 2023, the Company
confirmed the intent of the responses verbally.
Subsequently, on December 25, 2023, the Company received a proposal from the Initial Partner Candidate to decline theproposal regarding the Transactions (Initial Proposal), and on December 26, 2023, the Company also received from the Offeror
Related Parties a proposal on changes to the initial proposal for the Transactions, with partial changes to the Transactions (Initial
Proposal). In order to examine the impact on the changes to the initial proposal, the Company and the Special Committee27

conducted an interview with the Offeror Related Parties on January 4, 2024. In the interview, the Offeror explained to theCompany and the Special Committee that, though the business alliance matters proposed by the Initial Partner Candidate were
excluded from the scope of the proposal following the decline by the Initial Partner Candidate, the Offeror’s voting rights
ownership ratio would be increased to 50.00% after the Transactions, and thereby the Offeror would be able to provide promptand extensive support based on a stronger commitment with respect to the business alliance matters proposed by the Offeror.
Therefore, the Company and the Special Committee believe that it is worth deepening considerations and consultations regarding
the contents of the proposed changes to the initial proposal, and have decided to continue considering the Transactions.
In parallel, the Company has repeatedly held consultations with the Offeror since October 2023, on a specific business alliance,such as the management structure and business policies following the completion of the Transactions. After several consultations,the Company and the Offeror Related Parties have executed the Capital and Business Alliance Agreement as of February 6, 2024.
For a summary of the Capital and Business Alliance Agreement, refer to “(1) Capital and Business Alliance Agreement” under“4. Tendering shares by the Company’s shareholders in the Tender Offer and other material agreements relating to theTender Offer” below. In connection with the execution of the Capital and Business Alliance Agreement, it was agreed
that the business alliance agreement between MC and the Company on September 16, 2016 will be terminated subject to theeffectiveness of the Capital and Business Alliance Agreement.
In addition, the Offeror made the Initial Proposal pertaining to the Tender Offer Price in writing to the Company on December
26, 2023. In response to the Initial Proposal, on December 27, 2023, the Company requested the Offeror to review the Tender
Offer Price from the perspective of considering the interests of the Company’s minority shareholders. The Offeror who received
such request made the Second Proposal in writing to the Company on January 4, 2024. In response to the Second Proposal, on
January 6, 2024, the Company requested the Offeror to review the Tender Offer Price again from the perspective of considering
the interests of the Company’s minority shareholders. The Offeror who received such request made the Third Proposal in writing
to the Company on January 11, 2024. In response to the Third Proposal, on January 12, 2024, the Company requested theOfferor to review the Tender Offer Price again from the perspective of considering the interests of the Company’s minority
shareholders. The Offeror who received such request made the Fourth Proposal in writing to the Company on January 18, 2024.
In response to the Fourth Proposal, on January 24, 2024, the Company requested the Offeror to consider from the perspective ofconsidering the interests of the Company’s minority shareholders further increasing of the Tender Offer Price, in light of thegrowth in the current performance including the details of the Company’s Financial Results and the continuous rise in the current
stock price with a view to recommending support for and tender shares in the Transactions. The Offeror who received such
request made the Fifth Proposal in writing to the Company on January 26, 2024. In response to the Fifth Proposal, on January
28, 2024, the Company requested the Offeror to consider further increasing of the Tender Offer Price, with a view torecommending support for and tender shares in the Transactions from the perspective of considering the interests of theCompany’s minority shareholders. The Offeror who received such request made the Sixth Proposal in writing to the Company
on January 29, 2024. In response to the Sixth Proposal, on January 29, 2024, the Company requested the Offeror to consider
raising of the Tender Offer Price even more with a view to recommending support for and tender shares in the Transactions fromthe perspective of considering the interests of the Company’s minority shareholders. The Offeror who received such request
made the Seventh Proposal in writing to the Company on January 30, 2024. In response to the Seventh Proposal, on January
31, 2024, the Company requested the Offeror to consider raising of the Tender Offer Price even more with a view torecommending support for and tender shares in the Transactions from the perspective of sufficiently securing the interests of theCompany’s minority shareholders. The Offeror who received such request made the Final Proposal in writing to the Company
on January 31, 2024. In response to the Final Proposal, on February 2, 2024, the Company responded that it will accept theTender Offer Price of 10,360 yen, the Share Option Price of 1 yen, and the Tender Offer Price per Company Share relating toAmerican Depositary Shares represented by American Depositary Receipts of 10,360 yen.

28

In the course of the above review and negotiation process, the Special Committee has accordingly received reports from theCompany, SMBC Nikko Securities, the Company’s financial advisor, and Daiwa Securities, the Special Committee’s financial
advisor, and has made confirmations and expressed its opinions. Specifically, the Company has received affirmation from theSpecial Committee regarding the rationality of the contents of the business plan (the “Business Plan”) for the fiscal year ending
February 2024 through the fiscal year ending February 2028, its material conditions and assumptions, and the process of its
preparation, etc., and has obtained its approval. In addition, in negotiating with the Offeror, SMBC Nikko Securities, theCompany’s financial advisor has responded in accordance with the negotiation policies determined after deliberation by theSpecial Committee, and upon receipt of the Offeror’s proposal regarding the Tender Offer Price, it has immediately reported to
the Special Committee each time and has responded in accordance with its instructions.
On February 5, 2024, the Company received a report (the “Report dated February 5, 2024”) from the Special Committee on thesame day to the effect that (a) the Transactions will contribute to the enhancement of the Company’s corporate value, and the
purpose thereof is legitimate and reasonable; (b) the fairness and appropriateness of the terms and conditions of theTransactions (including the offer price in the Tender Offer) are ensured; (c) sufficient consideration has been given to theinterests of the shareholders of the Company through fair procedures in the Transactions; (d) it is appropriate for theboard of directors to express its opinion in favor of the Tender Offer and recommend that the shareholders of theCompany tender their shares in the Tender Offer, that it recommends that the holders of American Depositary Receipts
in respect of the Company Shares tender in the Tender Offer by delivering their American Depositary Receipts to thedepositary bank in advance and receiving delivery of the Company Shares related to American Depositary Shares
represented by the American Depositary Receipts, and that it leaves the decision to each of the Share Option Holders
whether or not to tender in the tender offer in respect of the share options; and (e) in addition to (a) through (d) above,the decision to enter into the Transactions would not be disadvantageous to the minority shareholders of the Company(for a summary of the Report dated February 5, 2024, refer to “(II) Establishment of independent special committee at theCompany and procurement of a report from the special committee” under “(6) Measures to ensure the fairness of the Tender
Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest” below).
(ⅲ) Details of the Company’s decision-making
In light of the circumstances described above, the Company, at its board of directors meeting held on February 6, 2024,
has carefully considered and discussed whether the Transactions, including the Tender Offer, will contribute to theenhancement of the Company’s corporate value, and whether the terms and conditions of the Transactions, including theTender Offer Price, are reasonable, with reference to the legal advice received from Anderson Mori & Tomotsune, andthe advice received from SMBC Nikko Securities and the share valuation report on the valuation of the Company Sharesthat was submitted by SMBC Nikko Securities as of February 5, 2024 (the “Share Valuation Report (SMBC Nikko
Securities)”), and giving its utmost consideration to the judgment of the Special Committee as described in the Report
dated February 5, 2024.
As a result, the Company has concluded that the Transactions will contribute to the enhancement of the Company’s
corporate value as follows.
As described in “(II) Background, purposes and decision-making process leading to the Offeror Related Parties’
decision to conduct the Tender Offer” above and in the descriptions of the synergies related to the Transactions below,
the retail industry, to which the Company belongs, is in a difficult situation with intensifying competition across businesscategories and diversifying consumer needs, as well as expected increases in various costs such as raw material costs,
labor costs, and distribution costs. In order to achieve sustainable growth in this environment, the Company believes it
is necessary to provide high value-added products and services in each of the Lawson Group’s businesses, pursue further
expansion in scale and efficiency, and deepen digital transformation to realize these goals, and amid the diversification29

of consumer values, including changes in lifestyle and consumer behavior triggered by the recent the COVID-19
pandemic, the Company has embarked on a transformation into “Real x Tech Convenience,” moving away from its
previous business model that relied solely on real stores. However, while the implementation of each initiative totransform the Company into “Real x Tech Convenience” is expected to contribute to enhancing the Company’s corporate
value in the medium to long term, the initial costs and investments will be required in the short term and may impact theCompany’s financial condition and results of operations, which may not necessarily be fully appreciated by the capital
markets in the short term. As such, the Company believes that it is reasonably difficult to implement each initiative
simultaneously and in a timely manner, and to pursue the interests of minority shareholders while remaining listed, andthere are also limitations from the perspective of contributing to the enhancement of the Company's corporate value.
Therefore, the Company has determined on February 6, 2024 that the best way to enhance the Company’s corporate
value is to accelerate the Company's growth by quickly and steadily maximizing the synergies described in A through K
below through the Offeror's making the Offeror Related Parties the sole shareholders of the Company, further promoting
the Company's speedy and bold transformation into “Real x Tech Convenience,” and actively implementing each
initiative to fundamentally strengthen the Company’s business and management base in response to the rapid changes inthe environment.
The specific synergies that the Company believes can be realized through the Transactions are as follows:A.

Acceleration of transformation into “Real x Tech Convenience” by leveraging management resources

As a business which needs to be responsive to changes, the Company has always embraced environmental changes inthe society, created businesses from the perspective of “convenience,” and achieved growth by winning customers’appreciation. In recent years, the Company has taken responsive measures such as renewing its product range andrenovating its stores to embrace the diversification of consumers’ values, including changes in lifestyles and consumer
behavior triggered by the COVID-19 pandemic. On the other hand, in pursuit of further “convenience,” the Company
believes that it can develop the world’s fastest delivery service (Quickest E-commerce Service: QEC) by utilizing its“real” shopping places, as EC centers. The Company is now taking on the challenge of making a giant leap from a“real” retail store to “Real x Tech Convenience” with tech-oriented QEC by making the best use of technology.
In order to expand and accelerate QEC, a tech-based new service, the Company is aiming to establish a system that will
enable consumers to check what products are in stock at any of its stores via their smartphones by the spring of 2024,sothat the Company’s warehouses for approximately 14,600 stores, bases for QEC, and approximately 3,000 items will bedirectly connected to consumers, enabling products to be delivered within 15 minutes at the earliest. The Company
believes that this QEC will be even more convenient and easy-to-use for customers, and is likely to accelerate andstabilize the growth of the business by further utilizing the resources and assets of the Offeror Group, which has strengths
in the digital field.

More specifically, by strengthening the technical system, such as system development bydispatching human resources, including engineers, from the Offeror, and strengthening the digital marketing system byleveraging the Offeror’s customer base of more than 13 million subscribers of its subscription service and big data of
high-resolution location information of approximately 31 million customers, which are unique to telecommunications
carriers, the Company will accelerate the transformation into “Real x Tech Convenience” by promoting QEC, which canprovide products to customers in the fastest possible time in the convenience store industry.
B.

Strengthened profitability by sharing the customer baseIn terms of the state of marketing, in recent years, in addition to traditional advertising methods such as TV commercials
as well as new digital touch points such as social media and owned apps, the development of digital transformation has
led to a focus on retail media, where retailers use data collected in physical stores to deliver ads tailored to consumers'

30

needs. The Company also aims to expand its marketing business by leveraging consumer data collected across storesand the Lawson Group’s businesses and owned media through the “Unified Use of Group Data Project” under the“Lawson Group Sweeping Transformation Executive Committee.”

The Company believes that strengthening theLawson Group’s membership base and increasing the number of loyal customers is necessary for the growth of thisbusiness.
To achieve these goals, the Company intends to leverage the Offeror Group’s customer base of about 31 million
customers and promote high-resolution marketing initiatives.

More specifically, in addition to reaching out toconsumers and drawing more customers by attracting new customers from the Offeror Group’s economic area andattracting customers to individual stores using location information, the Company intends to create new values in theareas of apps and membership by developing and offering new services. By promoting these measures, the Company
will be able to collect, aggregate, analyze and visualize a large volume of big data in a one-stop service, and maximize
the value of the data to consider promoting cross-selling and developing new businesses and services, which is expected
to expand its marketing business.
C.

Coexistence with local communities by providing social infrastructure using state-of-the-art technology

Convenience store operators have now established themselves as an essential social infrastructure for everyday life.
In order to ensure its position as an essential part of the community that provides support for residents, the Company,
which originally started as a “handyman in the community,” is determined to continue pursuing and advancing the “hubof refreshment in every community” from the customer’s perspective.

As a provider of social infrastructure, theCompany believes that it is necessary to utilize state-of-the-art technology to create the convenience stores of the future,as the Company is expected to solve local problems, revitalize local communities, and coexist more closely with local
communities.
For example, as the adoption of drones in society accelerates, the Offeror Group’s advanced drone technology is
expected to improve convenience for consumers in areas where there are no stores, thereby solving problems such as
depopulation and the aging population in the region.

In addition, by utilizing the 5G network and satellite

communication technology of the Offeror, a telecommunications operator, the Company will be able to provide medical
services such as remote diagnosis through health checks based on vital sensing, and to develop stores and offer products
in augmented reality and virtual reality linked to its owned apps through the Metaverse service. By providing services
that support various aspects of daily life, the Company hopes to transform the lifestyle experiences and behaviors toreflect the evolution of technology, solve social issues, and ultimately set the standard for the convenience stores of the
future.
D.

Strengthened business foundation by leveraging management resources such as high-level human resources andknow-how
The Company needs to consolidate its management resources to develop its core domestic convenience store businessand achieve growth in its portfolio businesses with high group synergy through the use of digital and technology. On
the other hand, the Company believes that it is necessary to train and secure human resources specialized in digitaltechnology, who can more effectively utilize AI and other technologies, and accumulate know-how in each business area.
Under these circumstances, the Offeror Group, MC Group, and the Company will promote the exchange of humanresources, and mutually provide human resources support, including the secondment and dispatch of employees, whichis expected to enable them to address the chronic labor shortage and develop human resources.

In addition, theCompany expects to strengthen the Lawson Group’s portfolio and maximize group-wide synergies by leveraging theknow-how regarding the financial business operated by the Offeror Group, collaborating in the entertainment field, and31

continuously sharing MC Group’s global network.
E.

Strengthened cooperation in the field of the environment for the realization of a decarbonized society

As more and more people recognize the importance of sustainability as a pressing issue, which is exemplified by climatechange, the Company is also taking steps to address this issue as a management priority. In particular, in response toenvironmental changes, the Company has developed its environmental vision, “Lawson Blue Challenge 2050!” and iscontributing to the formation of a decarbonized society through its decarbonization activities, reduction of food loss andplastic use, and other efforts. More specifically, the Company has set the following goals to be achieved by 2030: (1)a 50% reduction in CO2 emissions (per store, compared to FY 2013), (2) a 50% reduction in food loss (compared to FY2018), and (3) a 30% reduction in plastic use (compared to FY 2017). At this time, the Company is making steadyprogress on each of its goals with a 30.6% reduction in (1), a 23.1% reduction in (2), and a 25.1% reduction in (3) (all in2022).
In the future, by leveraging the capabilities of the Offeror Group and MC Group to promote the use of renewable energy
generated by solar panels, the purchase of discounted food products that are about to expire based on vast amounts oflocation and purchase data, and the replacement of plastic containers and plastic bottles with biomass materials, theCompany believes that it will be able to achieve the above goals before 2030, which is its milestone year, and further
strengthen and accelerate its green and sustainable initiatives in order to achieve each KPI, that is (1) a 100% reduction
in CO2 emissions (per store, compared to FY 2013), (2) a 100% reduction in food loss (compared to FY 2018), and (3)a 100% use of environmentally friendly materials for original product containers and packaging, before 2050.
F.

Growth of the Lawson Group’s businesses

In developing “Real x Tech Convenience,” MC and the Offeror Group are expected to share their fintech and otherfinancial know-how with the Company’s retail finance business.
In addition, the entertainment business is one of the Company’s key businesses for realizing the corporate philosophyof “Creating Happiness and Harmony in Our Communities.”

The Company believes that MC’s and the Offeror

Group’s content and capabilities related to digital technology will accelerate the Company’s growth in this business field.
In addition, smart digital capabilities and the ability to develop globally are also essential for the Company’s supermarket
business and overseas business, and the Company believes that the alliance with the two companies will also accelerate
the growth of these businesses as well.
G.

Reduction of the cost of maintaining the listing and the administrative burden and reallocation of resources

In recent years, the Company has been aware of an increase in the labor and financial costs required to maintain its
listing, and the Company recognizes that it cannot be denied that such increased costs may become an additional burden
on the Company’s operations.

The Company believes that by taking the Company Shares private through theTransactions, it will be able to allocate resources to the various important initiatives described above while avoiding thecosts associated with maintaining its listing.
In general, the disadvantages of the going private are that the Company will not be able to raise funds through equity
financing in the capital markets and that the Company will no longer be able to enjoy the benefits of being a listedcompany, such as enhanced social credibility and public confidence. However, the Company believes that, with respect
to financing, it will be able to obtain the necessary financing from financial institutions even after the implementing of
the Transactions, and the Company’s reputation, brand strength and social credibility, which are important for theCompany in recruiting personnel, are largely acquired and maintained through its business operations and can be32

acquired and maintained through its business operations even after the implementation of the Transactions. Therefore,
the Company believes that the impact of the delisting will be limited. In addition, the Company is planning to introduce
a new retirement benefit system that will provide the directors and executive officers of the Company with the economic
benefits that they should enjoy with the Share Options, which have been granted to them as compensation equivalent toretirement benefits, so that the implementation of the Transactions will not affect their interests.

Therefore, theCompany believes that it is less likely that the Company’s corporate value will be damaged due to the departure of theCompany’s directors and executive officers as a result of the implementation of the Transactions.
Based on the foregoing, the board of directors of the Company has determined that the advantages of taking theCompany Shares private outweigh its disadvantages and that taking the Company Shares private through theTransactions, including the Tender Offer, will contribute to the enhancement of the Company’s corporate value.
In addition, as the Tender Offer Price of 10,360 yen per Company Share is a reasonable price that ensures the benefits
that the Company’s minority shareholders should enjoy and that the other terms and conditions of the Tender Offer are
fair based on the reasons described below, the Company has therefore determined that the Tender Offer will provide theCompany’s minority shareholders with a reasonable opportunity to sell the Company Shares held by them at a price with
an appropriate premium:(a)the Tender Offer Price was agreed upon after thorough negotiations with the Offeror, with substantial
involvement of the Special Committee, and after the Company had taken sufficient measures to ensure thefairness of the terms and conditions of the Transactions, including the Tender Offer Price as described in“(6) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of theTender Offer Price and measures to avoid conflicts of interest” below;(b)

the Tender Offer Price is above the upper end of the range based on the market share price method andwithin the range based on the discounted cash flow analysis (the “DCF Method”) of the valuation of theCompany Shares calculated by SMBC Nikko Securities in the Share Valuation Report (SMBC Nikko
Securities) as described in “(I) Procurement of a share valuation report from an independent third-party
valuator retained by the Company” under “(3) Matters related to calculation,” below;(c)for the Transactions, the Tender Offer Period is set at 21 business days, but there is a long period of time
between the announcement of the proposed tender offer and the actual commencement of the tender offer,and therefore, the opportunity for the minority shareholders to reasonably decide whether to tender theirshares in the Tender Offer and the opportunity for a person other than the Offeror to purchase the Company
Shares are ensured;(d)although the minimum number of the Tender Offer is lower than the number of shares to be purchasedfrom the “Majority of Minority” in respect of the Transactions, other sufficient measures have been takenin the Transactions to ensure the fairness of the Tender Offer, and therefore, it is expected that the fact thatthe minimum number of shares to be purchased is not set for the “Majority of Minority” is unlikely toaffect the fairness of the Tender Offer;(e)the amount of money to be delivered to the shareholders as consideration for the Share Consolidation in
the Transactions will be calculated to be equal to the Tender Offer Price multiplied by the number of theCompany Shares held by each of the Company’s shareholders (excluding the Company and the Offeror
Related Parties), and the opportunity for the minority shareholders to make a reasonable decision as towhether or not to tender their shares in the Tender Offer will be ensured so as not to be coercive; and(f)as to the Tender Offer Price and other terms and conditions of the Tender Offer, it has been determined in
the Report dated February 5, 2024 obtained from the Special Committee that the fairness and33

appropriateness of the terms and conditions of the Transaction (including the Tender Offer Price) areensured as described in “(II) Establishment of independent special committee at the Company andprocurement of a report from the special committee” under “(6) Measures to ensure the fairness of theTender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid
conflicts of interest.”
Based on the foregoing, the Company resolved at the board of directors meeting held on February 6, 2024, as theCompany’s opinion as of the same day, to the effect that, if the Tender Offer is commenced, it shall express its opinion
in favor of the Tender Offer and recommend that the Company’s shareholders tender their shares in the Tender Offer,that it recommends that the owners of the American Depositary Receipts tender in the Tender Offer by delivering their
American Depositary Receipts to the Depositary Bank in advance and receiving delivery of the Company Shares related
to American Depositary Shares represented on the American Depositary Receipts, and that it leaves the decision to the
Share Option Holders whether or not to tender in the Tender Offer.
The afore-mentioned board of directors meeting resolved to, when the Tender Offer is commenced, request the Special
Committee established by the Company to consider whether or not the opinion expressed by the Special Committee tothe board of directors of the Company as of February 5, 2024 has changed, and if it has not, to inform the board of thedirectors of the Company to that effect, and if it has changed, to state its changed opinion, and based on such opinion of
the Special Committee, the board of directors of the Company will restate its opinion on the Tender Offer when theTender Offer is commenced.
Subsequently, on February 21, 2024, the Company was informed by the Offeror that it expected that the Competition
Law Procedures will be completed by late March 2024, and assuming such expectation, it expected the Tender Offer tobe commenced on March 28, 2024. Further, on March 22, 2024, the Company was informed by the Offeror that, as
the Competition Law Procedures have been completed, the Offeror intends to commence the Tender offer on March 28,
2024, subject to the satisfaction of the Conditions Precedent.
In response to this, on March 25, 2024, the Company requested the Special Committee to consider whether or not theopinion expressed by the Special Committee to the board of directors of the Company as of February 5, 2024 haschanged, and if it has not, to inform the board of the directors of the Company to that effect, and if it has changed, tostate its changed opinion, and received on March 26, 2024, the submission of the Report dated March 26, 2024 statingthat the Special Committee does not consider any change is necessary to the content of the report submitted by theSpecial Committee to the board of directors meeting dated February 5, 2024.

Accordingly, the Company again

carefully discussed and considered the contents of the terms and conditions of the Tender Offer in light of the contentsof the Report dated March 26, 2024 as well as the Company’s business performance and changes in the market
environment, etc. since the board of directors meeting on February 6, 2024.
As a result, the Company still believes as of today that the Transactions will contribute to the enhancement of theCompany’s corporate value, and the purpose of the Transactions and the meaning and necessity of achieving such
purpose have only been enhanced and never decreased, and that there are no factors that would change the Company’s
decision about the Tender Offer as of February 6, 2024. Therefore, the Company again resolved at its board of directors
meeting held today, that it shall express its opinion in favor of the Tender Offer and recommend that the Company’s
shareholders tender their shares in the Tender Offer, that it recommends that the owners of the American Depositary
Receipts tender in the Tender Offer after delivering their American Depositary Receipts to the Depositary Bank inadvance and receiving delivery of the Company Shares related to American Depositary Shares represented on theAmerican Depositary Receipts, and that it leaves the decision to the Share Option Holders whether or not to tender in
the Tender Offer. The Company also reported to the Offeror today that, as of today, there are no undisclosed material

34

facts concerning the Company’s businesses or undisclosed facts relating to the implementation of tender offers, etc.
concerning the Company’s Share Certificates.
For the details of the decision-making process of the Company’s board of directors, refer to “(VIII) Receipt of
unanimous approval of all disinterested directors of the Company and the opinion of all disinterested auditors of theCompany that they have no objection” under “(6) Measures to ensure the fairness of the Tender Offer, such as measures
to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest.”(3) Matters related to calculation(I) Procurement of a share valuation report from an independent third-party valuator retained by the Company(i) Name of the valuator and relationship with the Company and the Offeror Related Parties
In expressing its opinion on the Tender Offer, in order to ensure the fairness of its decision-making on theTender Offer Price presented by the Offeror, the Company requested SMBC Nikko Securities, a financial
advisor, to calculate the value of the Company Shares as a third-party valuator independent of the Offeror
Related Parties and the Company, and received the Share Valuation Report (SMBC Nikko Securities) as ofFebruary 5, 2024. SMBC Nikko Securities does not constitute a related party of the Offeror Related Parties or
the Company and has no material interest in the Transactions including the Tender Offer. SMBC Nikko
Securities is a member of Sumitomo Mitsui Financial Group, Inc., same as Sumitomo Mitsui Banking
Corporation, which provides the Lawson Group, the Offeror Group and the MC Group with financing
transactions, etc. as part of ordinary banking transactions. However, in light of SMBC Nikko Securities’ trackrecord as a third-party valuator, and based on the fact that as a measure to prevent negative effects, measures toblock information as provided in the internal regulations have been taken between (a) the department responsible
for calculating the value of the Company Shares in SMBC Nikko Securities and (b) other departments therein
and Sumitomo Mitsui Banking Corporation, that the Company and SMBC Nikko Securities conducttransactions on the same terms and conditions as their general trading partners, thereby the independence as afinancial advisor and third-party valuator is ensured, that SMBC Nikko Securities does not constitute a related
party of the Company and the Offeror Related Parties and thus it can be considered that there is no particular
problem with the Company’s request to SMBC Nikko Securities to calculate the value of the Company Shares,
the Company has appointed SMBC Nikko Securities as its financial advisor and third-party valuator. At its
initial meeting, the Special Committee confirmed that there were no problems with the independence andexpertise of SMBC Nikko Securities, and approved SMBC Nikko Securities as a financial advisor and thirdparty valuator of the Company. The Company has not obtained an opinion concerning the fairness of theTender Offer Price (fairness opinion) from SMBC Nikko Securities, as the Company has determined thatmeasures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest have beentaken and that the fairness of the Transactions is sufficiently ensured.
The compensation to SMBC Nikko Securities for the Transactions includes a performance fee to be paid
subject to the successful completion of the Transactions, etc. Taking into account general practices in similartransactions and the appropriateness of the compensation structure that would impose a reasonable financial
burden on the Company if

the Transactions fail, the Company has determined that the inclusion of aperformance fee to be paid subject to the completion of the Tender Offer would not negate the independence,and therefore appointed SMBC Nikko Securities as the Company’s financial advisor and third-party valuator inaccordance with the above compensation structure.
(Note) SMBC Nikko Securities assumed that all of the materials and information on which the Share35

Valuation Report (SMBC Nikko Securities) was based were accurate and complete, and has notindependently verified the accuracy or completeness thereof and assumes no obligation or liability
therefor, and assumed that the Company had not been aware of any facts or circumstances thatwould render any information provided to it inaccurate or misleading. In addition, no independent
evaluation, appraisal or assessment of the assets or liabilities of the Company or its affiliates has been
conducted, and no request for evaluation, appraisal or assessment thereof has been made to any thirdparty agent. If any problems are found in the accuracy or completeness of these materials or
information, the valuation results may differ significantly. Furthermore, it is assumed that there are
no undisclosed lawsuits, disputes, claims and obligations or other contingent or off-balance-sheet
liabilities related to the environment or taxation or other matters concerning the Company or its
affiliates, and any other facts that could materially affect the Share Valuation Report (SMBC Nikko
Securities). It is assumed that the business plans, etc. used by SMBC Nikko Securities in the Share
Valuation Report (SMBC Nikko Securities) were prepared by the Company in accordance withreasonable and appropriate procedures based on the best possible estimates and judgments as of therecord date of the valuation. In addition, if SMBC Nikko Securities conducted an analysis in the
Share Valuation Report (SMBC Nikko Securities) with the presumptions under the materials andinformation provided to it, SMBC Nikko Securities assumed that such materials, information andpresumptions provided were accurate and reasonable. SMBC Nikko Securities has notindependently verified the accuracy, adequacy and feasibility of these assumptions and are not underobligation or liability therefor. The valuation results of SMBC Nikko Securities were submitted to
the Company by SMBC Nikko Securities, at the Company’s request, for the sole purpose ofcontributing to consideration of the Tender Offer Price by the Company’s board of directors, andsuch valuation results do not constitute an opinion of SMBC Nikko Securities on the fairness of theTender Offer Price.
(ii) Summary of calculation
In expressing its opinion on the Tender Offer, the Company requested SMBC Nikko Securities, a financial
advisor, to calculate the value of the Company Shares as a third-party valuator independent of the Offeror
Related Parties and the Company, and received the Share Valuation Report (SMBC Nikko Securities) as ofFebruary 5, 2024.
SMBC Nikko Securities calculated the value of the Company Shares based on the market share price method
because the Company Shares were listed on the TSE Prime Market and had a market share price, and based on
the DCF Method to reflect the future business activities in the valuation.
The range of value per share of the Company Shares calculated by SMBC Nikko Securities based on each of
the above methods is as follows.
Market share price method:

7,248 yen – 8,039 yen

DCF Method:

9,609 yen – 14,907 yen

Under the market share price method, the value per share of the Company Shares was calculated to be in therange of 7,248 yen to 8,039 yen based on the simple average closing price of the Company Shares on the TSE
Prime Market for the most recent one month (8,039 yen), for the most recent three months (7,526 yen), and forthe most recent six months (7,248 yen), with the record date of February 2, 2024, the two business days before

36the announcement date of the planned commencement of the Tender Offer. Under the DCF Method, the value
per share of the Company Shares was calculated to be in the range of 9,609 yen to 14,907 yen, following the
calculation of corporate value and share value of the Company after the free cash flow that the Company was
expected to generate in and after the fourth quarter ending February 2024 was discounted to the present value
at a certain discount rate, based on various factors such as the Business Plan prepared by the Company andinformation disclosed to the general public. The Business Plan prepared by the Company, which SMBC
Nikko Securities used for the calculation under the DCF Method, does not include any fiscal year in which asignificant increase or decrease in profit is expected on a year-on-year basis.

In addition, the synergies

expected to be realized as a result of the Transactions are not taken into account in the financial forecast because
it was difficult to estimate such synergies specifically as of February 5, 2024.
(II) Procurement of a share valuation report from an independent third-party valuator retained by the Special Committee(i) Name of the valuator and relationship with the Company and the Offeror Related Parties
In considering the Matters for Consultation, in order to ensure the fairness of the terms and conditions of theTransactions, including the Tender Offer Price, the Special Committee requested Daiwa Securities, a financial
advisor, to calculate the value of the Company Shares as a third-party valuator independent of the Offeror
Related Parties and the Company, and received a share valuation report (the “Share Valuation Report (Daiwa
Securities)”) concerning valuation of the Company Shares as of February 5, 2024. The Special Committee
requested Daiwa Securities, a third-party valuator independent of the Offeror Related Parties and the Company,
to submit a fairness opinion (the “Fairness Opinion”) stating the fairness of the terms and conditions of theTransactions, including the Tender Offer Price, and obtained it as of February 5, 2024. Daiwa Securities does
not constitute a related party of the Offeror Related Parties or the Company and has no material interest in theTransactions including the Tender Offer. At its initial meeting, the Special Committee confirmed that there
were no problems with the independence and expertise of Daiwa Securities, and appointed Daiwa Securities asa financial advisor and third-party valuator of the Special Committee.
The compensation to Daiwa Securities for the Transactions includes only the fixed fee to be paid regardlessof the success or failure of the Transactions, and does not include a performance fee to be paid subject to thesuccessful completion of the Transactions.
(ii) Summary of calculation
In considering the Matters for Consultation, the Special Committee requested Daiwa Securities, a financial
advisor, to calculate the value of the Company Shares as a third-party valuator independent of the Offeror
Related Parties and the Company, and received the Share Valuation Report (Daiwa Securities) as of February 5,
2024.
Based on its judgment that it is appropriate to multilaterally evaluate the value of the Company Shares after
considering valuation methods to be adopted in calculating the value of the Company Shares from among
various valuation methods and under the assumption that the Company is a going concern, Daiwa Securities
analyzed the value per share of the Company Shares based on the market share price method because theCompany Shares were listed on the TSE Prime Market and had a market share price, and based on the DCF
Method to reflect the Company’s financial performance and forecast, etc. in the valuation, and the Special
Committee received the Share Valuation Report (Daiwa Securities) as of February 5, 2024.
The range of the value per share of the Company Shares calculated based on each of the above methods is asfollows.

37

Market share price method:

7,264 yen - 8,721 yen

DCF Method:

7,037 yen - 14,514 yen

Under the market share price method, with the calculation record date of February 5, 2024, the value per shareof the Company Shares was calculated to be in the range of 7,264 yen to 8,721 yen based on the closing priceof the Company Shares on the TSE Prime Market as of the record date (8,721 yen), based on the simple averageclosing price thereof for the most recent one month (8,154 yen), for the most recent three months (7,545 yen),and for the most recent six months (7,264 yen).
Under the DCF Method, assuming the fact that, based on some factors such as the Business Plan and any
information disclosed to the general public, all business in which the Seijo Ishii business and the China businessare excluded from Seijo Ishii business, the China business and Consolidated Business (the “Company
Consolidated Business (excluding the Seijo Ishii business and the China business)”) are examined, the value pershare of the Company Shares was calculated to be in the range of 7,037 yen to 14,514, following the calculationof corporate value and stock value of the Company after the free cash flow that the Company was expected togenerate in and after the fourth quarter ending February, 2024 was discounted to the present value at a certain
discount rate. The financial projection based on the Business Plan prepared by the Company, which Daiwa
Securities used for the calculation under the DCF Method, includes a fiscal year in which a significant increaseor decrease in profit is expected on a year-on-year basis. Specifically, in the Company Consolidated Businesses(excluding the Seijo Ishii business and the China business), the Company expects a significant increase in free
cash flow (fiscal year ending February 2026: 44,551 million yen, up 57.0% year-on-year, and fiscal year ending
February 2026: 60,948 million yen, up 36.8% year-on-year). In addition, the synergies expected to be realized
as a result of the Transactions are not taken into account in the financial forecast because it was difficult toestimate such synergies specifically as of February 5, 2024.
(iii) Summary of the Fairness Opinion
The Special Committee received the Fairness Opinion as of February 5, 2024 from Daiwa Securities to theeffect that the purchase price of 10,360 yen per share of the Company Shares in the Tender Offer was fair froma financial point of view, to the Company’s shareholders excluding the Offeror Related Parties and their affiliates.
The Fairness Opinion was approved to be prepared and submitted after the analysis and examination offinancial information, including business forecasts, and the examination of the valuation of the Company Sharesconducted by Daiwa Securities through a question-and-answer session with the Special Committee, as well asa question-and-answer session between the Company and the Special Committee on the circumstances and thebackground leading to the support for the Tender Offer, and the approval by the Fairness Opinion Approval
Meeting at Daiwa Securities.
(Note) In expressing its opinion contained in the Fairness Opinion, Daiwa Securities assumed that all materials
and information that Daiwa Securities analyzed and examined are accurate and complete, and, has notindependently verified the accuracy or completeness of such materials and information, and assumes noobligation therefor. In expressing its opinion contained in the Fairness Opinion, Daiwa Securities assumed
that no events had occurred relating to the Company that had not been disclosed to Daiwa Securities and would
affect the corporate value of the Company, as of the date of expressing its opinion. Daiwa Securities has notconducted any independent evaluation, appraisal or assessment of all assets and liabilities (including but notlimited to financial derivatives, off-balance-sheet assets and liabilities, or other contingent liabilities) of theCompany and its affiliates, including analysis and evaluation of individual assets and liabilities, nor has it

38

requested any third-party agent to conduct any evaluation, appraisal or assessment thereof. Daiwa Securities
has not evaluated the solvency or creditworthiness of the Company and its affiliates under any applicable laws
and regulations relating to bankruptcy, insolvency or similar matters. Daiwa Securities does not make, andassumes no obligation to make, any on-the-spot inspection of any property or facilities of the Company and its
affiliates.
In expressing its opinion contained in the Fairness Opinion, Daiwa Securities assumed that the business plan,
financial forecast and other forward-looking information provided to it had been reasonably prepared based on
the best possible estimates and judgments at the time of calculation made by the Company’s management and,with the consent of the Company and the Special Committee, relied on such information without independent
verification. Daiwa Securities assumed that there would be no change in situations that could materially affect
the Company’s assets, financial condition, business or prospects after the date of preparation or provision of thebusiness plan, financial forecast or other forward-looking information provided to it. In expressing its opinion
contained in the Fairness Opinion and conducting analysis underlying therein, Daiwa Securities placed a numberof assumptions about industry situations, general business and economic situations and other matters, many ofwhich would be beyond the control of the Company and the Offeror. All forecasts included in such analysis
conducted by Daiwa Securities are not necessarily indicative of the future results or actual value, but such results
or value may be significantly better or worse than those implied in such forecasts.
Daiwa Securities also assumed that all governmental, regulatory or others’ consents and approvals necessary
for the successful completion of the Tender Offer would be obtained without adversely affecting the expected
benefits of the Tender Offer. Daiwa Securities has not been asked by the Company and the Special Committee
to, and does not, review the Company’s decision-making regarding the successful completion of the Tender
Offer or a comparative evaluation of the Tender Offer and other strategic options. Daiwa Securities is not alegal, accounting or tax expert, and has not independently analyzed or examined the legality or validity of any
matters concerning the Tender Offer and the appropriateness of accounting and tax treatment, and does notassume any obligation therefor.
Daiwa Securities will receive fees from the Company as consideration for the provision of advisory service(the “Advisory Service”) in connection with the Tender Offer, whether or not the Tender Offer is successfullycompleted. The Company has agreed to indemnify Daiwa Securities against certain liabilities which may arise
in connection with the Advisory Service.
Daiwa Securities and its affiliates provide or may in the future provide, for consideration, investment andfinancial services, including securities-related services, to the Company, the Offeror Related Parties and theiraffiliates. Daiwa Securities and its affiliates may also trade or hold financial instruments, including securities
and financial derivatives, of the Company and its affiliates for their own accounts or for the accounts ofcustomers.
The Fairness Opinion was prepared solely for the purpose of use as reference information for the Special
Committee’s consideration of the Tender Offer Price. Daiwa Securities does not recommend to the Special
Committee any particular purchase price, nor does it recommend that a particular purchase price be the only
appropriate purchase price. The Company and the Special Committee may not disclose or convey the Fairness
Opinion to any third party or allow any third party to refer to the Fairness Opinion without the prior writtenconsent of Daiwa Securities. The opinions contained in the Fairness Opinion are not addressed to any third
party other than the Special Committee and may not be trusted or relied upon by any such third party for any
purpose. Furthermore, the opinions expressed by Daiwa Securities in the Fairness Opinion do not constituteany recommendation or solicitation to the common shareholders of the Company to exercise their voting rights39

or other shareholder rights in connection with the Tender Offer, or to transfer or accept the Company Shares, or
any other related matters.
In the Fairness Opinion, Daiwa Securities expresses its opinion only as to whether the Tender Offer Price isfair, from a financial point of view, to the common shareholders of the Company excluding the Offeror Related
Parties and their affiliates, and Daiwa Securities has not been asked to provide an opinion as to whether theTender Offer Price is fair to third parties other than the shareholders of the Company excluding the Offeror
Related Parties and their affiliates, or on any other matters, and has not provided an opinion thereon. In the
Fairness Opinion, Daiwa Securities expresses no opinion with respect to each of the premises or assumptions
underlying the determination of the Tender Offer Price or the Company’s decision-making regarding the Tender
Offer. In addition, Daiwa Securities expresses no opinion in the Fairness Opinion with respect to the price ofthe common share of the Company to be traded on or after the date of the Fairness Opinion. In connection
with the Tender Offer Price, Daiwa Securities expresses no opinion as to the fairness of the amount or nature of
any compensation to be received by any officer, director or employee or the same kind of person engaged in theTender Offer. In preparing the Fairness Opinion, Daiwa Securities has not been authorized by the Company,
the Company’s board of directors or the Special Committee to solicit any third party other than the Offeror to
express an interest in acquiring all or any part of the Company, nor has solicited in the past.
The opinions expressed by Daiwa Securities in the Fairness Opinion were based on financial, economic,
market and other situations as of the date of the Fairness Opinion, and relied on information available to Daiwa
Securities as of such date. The opinions expressed by Daiwa Securities in the Fairness Opinion may beaffected by future changes in situations, but Daiwa Securities assumes no obligation to update, revise or reaffirm
its opinion.
(III) Procurement of a share valuation report from an independent third-party valuator retained by the Offeror(I)

Basis for calculation

To ensure the fairness of the Tender Offer Price, the Offeror, in determining the Tender Offer Price for the Company
Shares, requested UBS Securities, its financial adviser, to calculate the value of the Company Shares as its third-party
valuation institution independent of the Offeror Related Parties and the Company. UBS Securities is not a related partyof the Offeror Related Parties or the Company and has no material interest in the Transactions including the Tender Offer.
(i)Common shares

After considering the valuation method that should be adopted among various share valuation methods when assessing
the share value of the Company, UBS Securities assess the share value of the Company using each of (i) the average
market price analysis because the Company Shares are listed on the TSE Prime Market, (ii) the comparable company
analysis because there is a listed company comparable to the Company and it is possible to infer by analogy the sharevalue of the Company by comparing the Company with such a comparable company, and (iii) the DCF Method so as toreflect future business activities in the valuation, subject to the condition precedent set forth below (Note) and certain
other conditions, based on the premise that the Company is a going concern and from the perspective that it would beappropriate to assess the share value of the Company in multiple ways. As of February 5, 2024, the Offeror received
the share valuation report (the “Share Valuation Report (UBS Securities)”) from UBS Securities. In addition, as theOfferor takes each measures described in “(6) Measures to ensure the fairness of the Tender Offer, such as measures toensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest” below, and considers and decides
the Tender Offer Price through the discussion and negotiation with the Company, the Offeror has not obtained an opinion
concerning the fairness of the Tender Offer Price (fairness opinion) from UBS Securities.

40

According to UBS Securities, the ranges of the per share value of the Company Shares calculated using each of theabove methods are as follows. For the conditions precedent and considerations related to the preparation of the Share
Valuation Report (UBS Securities) and the valuation analysis that serve as a basis therefor, please refer to the below(Note).
Average market price analysis:

7,264 yen to 8,721 yen

Comparable company analysis:

6,568 yen to 8,835 yens

DCF Method:

9,711 yen to 13,038 yen

Under the average market price analysis, February 5, 2024 was used as the valuation base date, and the per share valueof the Company Shares was calculated to range from 7,264 yen to 8,721 yen, based on the closing price of the Company
Shares listed on the TSE Prime Market on the valuation base date 8,721 yen and the simple average of closing prices
over the prior one month was 8,154 yen, over the prior three months was 7,545 yen, and the simple average of closing
prices over the prior six months was 7,264 yen.
Under the comparable company analysis, the share value of the Company was calculated through comparison withtrading prices and financial indices indicating profitability, etc. of listed company engaged in businesses considered tobe relatively similar to those of the Company. The per share value of the Company Shares was calculated to range
from 6,568 yen to 8,835 yen.
Under the DCF Method, the per share value of the Company Shares was calculated to range from 9,711 yen to 13,038
yen, as a result of analyzing the enterprise value and the equity value of the Company by discounting the free cash flowthat is expected to be generated by the Company in the future using a certain discount rate, based on the earnings forecastof the Company in and after the fiscal year ending February 2024 which takes into consideration of various factors
including the Company’s business plan confirmed by the Offeror for five years from the fiscal year ending February
2024 to the fiscal year ending February 2028, the trend of the Company’s business performance and publicly available
information. The Company’s business plan which served as a basis for the DCF Method does not include any fiscal
year in which a substantial increase/decrease in profit is expected. Further, the business plan does not assume theimplementation of the Transactions, and does not include the synergies expected to be realized from the implementationof the Transactions being completed because it is difficult to specifically estimate such synergies at the time of calculation.
(Note)The Share Valuation Report (UBS Securities) has been delivered solely for the Offeror to examine
the Tender Offer Price of the Company Shares from a financial point of view. UBS did not conduct
any valuation analysis of the Share Options. The Share Valuation Report (UBS Securities) does
not express any opinion or view on the following: (a) the terms of, or other aspects of, theTransactions (including, without limitation, the manner or structure of the Transactions or otherelements) or (b) the relative advantage of the Transactions compared with other strategies ortransactions that may be adopted or implemented by the Offeror, or business decision-making
related to promoting or implementing the Transactions. Furthermore, the Share Valuation Report(UBS Securities) does not make any recommendations to the Offeror and the Board of the Directorsof the Offeror on any particular purchase price or any recommendations that any particularpurchase price is the only appropriate purchase prices. UBS Securities also does not express any
opinion or view on the fairness (whether financial or otherwise), as compared with the Tender Offer
Price, of the amount, nature, or other aspects of any remuneration for officers, directors, or
employees of any party to the Transactions. The Share Valuation Report (UBS Securities) does41not express any opinion on the price at which the Company Shares should be transacted at any time,
including after the Transactions are publicly announced or commences.
In preparing the Share Valuation Report (UBS Securities), UBS Securities has assumed and relied
upon the accuracy and completeness of the assumptions and information that were publicly available
or were furnished to UBS Securities by the Offeror or the Company or their other advisors or wereotherwise reviewed by UBS Securities for the purposes of preparing the Share Valuation Report(UBS Securities). The content of the assumptions and information has not been independently
verified by UBS Securities or any of its directors, officers, employees, agents, representatives and/or,
advisers, or any other person.
No representation, warranty, or undertaking, express or implied, is or will be given by UBS
Securities or its directors, officers, employees, agents, representatives, or advisors in relation to theaccuracy, completeness, reliability, or sufficiency of the information contained in the Share Valuation
Report (UBS Securities) or the reasonableness of any assumption contained in the Share Valuation
Report (UBS Securities).
The Share Valuation Report (UBS Securities) is provided solely for the benefit of the Offeror, andthe Offeror’s shareholders and other persons should not rely upon the Share Valuation Report (UBS
Securities) and will not be conferred any interests, rights, or remedies by the Share Valuation Report(UBS Securities).
By receiving the Share Valuation Report (UBS Securities), the Offeror acknowledges and agrees
that to the maximum extent permitted by law, except in the case of fraud and save as provided in theengagement letter, UBS Securities and its directors, officers, employees, agents, representatives andadvisors expressly disclaim any liability which may arise from the Share Valuation Report (UBS
Securities), or any other written or oral information provided in connection with the Share Valuation
Report (UBS Securities), and any errors contained therein or omissions therefrom.
The Share Valuation Report (UBS Securities) may also contain forward-looking statements,
projections, estimates, forecasts, targets, and/or opinions (collectively, the “Forecasts”) provided to
UBS Securities by the Offeror or the Company, and UBS Securities has relied upon the opinion of
the Offeror as to the reasonableness and achievability of the Forecasts (and the assumptions andbases thereof).

UBS Securities has assumed that the Forecasts represent the best available

assessments and judgments of the Offeror and the Company as of the date of the Share Valuation
Report (UBS Securities) and that the Forecasts will be realized in the amounts and time periods
contemplated by the Offeror and the Company. All assumptions contained in the Share Valuation
Report (UBS Securities) have been discussed and agreed with the Offeror. The Forecasts involve
significant assumptions and subjective judgments which may or may not prove to be correct, andthere can be no assurance that any Forecasts are a reliable indicator of future performance, nor thatthey are attainable or will be realized. No representation or warranty is given as to the achievement
or reasonableness of, and no reliance should be placed on, any Forecasts contained in the Share
Valuation Report (UBS Securities). The Share Valuation Report (UBS Securities) was preparedbased on the economic, regulatory, market, and other conditions as in effect on the date thereof andthe information made available to UBS Securities as of the same date. Subsequent changes in these
conditions may affect the information contained in the Share Valuation Report (UBS Securities).
The Share Valuation Report (UBS Securities) speaks as at the date thereof (unless an earlier date isotherwise indicated therein), and in furnishing the Share Valuation Report (UBS Securities), no42

obligation is undertaken, nor is any representation or undertaking given, by any person: (i) to provide
the Offeror with any additional information, (ii) to update, revise, or re-affirm any information in the
Share Valuation Report (UBS Securities), including any Forecasts, or (iii) to correct any inaccuracies
therein which may become apparent.
The analyses conducted by UBS Securities described in the Share Valuation Report (UBS Securities)
are summaries of the material financial analyses presented by UBS Securities to the Offeror inconnection with the Share Valuation Report (UBS Securities) and are not comprehensive
descriptions of all analyses undertaken or information referred to by UBS Securities in connection
with the Share Valuation Report (UBS Securities). The preparation of the Share Valuation Report(UBS Securities) and its underlying analysis are a complex analytical process involving various
judgments about the appropriateness and relevance of methods of financial analysis and theapplication of those methods to the particular circumstances; therefore, a part or summary of theanalysis results do not necessarily accurately present all aspects of the analyses. UBS Securities’
analysis results must be considered holistically, and reference to a part or summary thereof, without
considering all of such analysis results as a whole, may give rise to failure to obtain a correctunderstanding of the processes underlying UBS Securities’ analyses.

None of the companies

reviewed in UBS Securities’ analyses as a comparable company is identical to any business units or
subsidiaries of the Company, and these companies were selected because they were publicly traded
companies with businesses that, for purposes of UBS Securities’ analyses, could be consideredsimilar to those of the Company.

The analyses made by UBS Securities necessarily involve

complex considerations and judgments concerning differences in financial and businesscharacteristics of the companies reviewed for comparison with the Company and other factors that
could affect these companies.
In preparing the Share Valuation Report (UBS Securities), UBS Securities has: (i) not made any
independent valuation or appraisal of the physical assets and liabilities of the Company or any othercompany referred to in the Share Valuation Report (UBS Securities), nor been furnished with any
such valuation or appraisal; (ii) not carried out any assessment as to the commercial merits of theTransactions; (iii) not conducted any legal, tax, accounting, or other analysis in respect of theTransactions, and where relevant, has relied solely upon the judgments of the relevant professional
advisors in these areas; and (iv) assumed that in the course of obtaining any regulatory or third party
approvals, consents, and releases for the Transactions, no delay, limitation, restriction, or condition
would be imposed that would have an adverse effect on the Company, any other company referred
to in the Share Valuation Report (UBS Securities), or the Transactions.
UBS Securities is acting as financial advisor of the Offeror in connection with the Transactions andreceives remuneration for its services as financial advisor, and such remuneration becomes payablesubject to the successful completion of the Transactions. In addition, the Offeror has agreed toindemnify UBS Securities for all costs borne by UBS Securities in relation to UBS Securities’
involvement and certain liabilities arising out of UBS Securities’ engagement.
The Offeror comprehensively considered elements such as the valuation results of the Share Valuation Report (UBS
Securities) obtained on February 5, 2024 from UBS Securities, the results of due diligence conducted on the Company
during the period from mid-October 2023 to late-January 2024, the approval or disapproval of the Tender Offer by theCompany’s board of directors, the trends in market price of the Company Shares, and prospects for tendering in the43

Tender Offer, and took into account the results of consultations and negotiations with the Company, and decided to set
the Tender Offer Price at 10,360 yen per share on February 6, 2024.
The Tender Offer Price of 10,360 yen per share of the Company Shares represents a price obtained by adding a premiumof 18.79% to the closing price of 8,721 yen of the Company Shares in the Prime Market of the TSE on February 5, 2024,
the business day prior to the date of the announcement of the scheduled commencement of the Tender Offer, premiumof 27.05% to the simple average of closing prices of 8,154 yen for the last one month until the same date, premium of
37.31% to the simple average of closing prices of 7,545 yen for the last three months until the same date, or premium of
42.62% to the simple average of closing prices of 7,264 yen for the last six months until the same date, respectively.
In addition, the Tender Offer Price per Company Share, 10,360 yen, exceeds the upper limit of the valuation result
range, based on the average market price analysis and the comparable companies analysis in the Share Valuation Report(UBS Securities), and is within the valuation result range based on the DCF Method.
(ii) Share Options
The Share Options were granted to directors and executive officers of the Company as executive compensationequivalent to retirement benefits. The holder of the Share Options may exercise such holder’s Share Options only in alump sum, within the exercise period of the Share Options, which is limited to the 10-day period (or the following
business day, if the 10th day falls on a holiday) from the date following the date on which such holder has lost his/her/theirposition as the Company’s director or executive officer. Considering the fact that the Offeror may not exercise theShare Options even if the Offeror acquires them, the Offeror set the Share Option Price at 1 yen. Since the Offeror set
the Share Option Price as described above, the Offeror has not obtained a valuation report from a third-party valuator.
(iii) American Depositary Receipts
The American Depositary Receipts represent the American Depositary Shares deposited with Depositary Banks, and
one American Depositary Shares is equivalent to one-fourth of a Company Share. Since in the Tender Offer, tendersof the American Depositary Receipts themselves will not be accepted and instead, tenders of the Company Shares
relating to the American Depositary Shares represented by the American Depositary Receipts will be accepted, as to theprice of the tender offer of the American Depositary Receipts, the price per Company Share for the Company Shares tobe received by delivering the American Depositary Shares to the Depositary Bank is set at 10,360 yen per share, whichis the same price as the Tender Offer Price.
(II) Background of calculation(Background leading to the decision of the Tender Offer Price)
As described in “(II) Background, purposes and decision-making process leading to the Offeror Related Parties’
decision to conduct the Tender Offer” under “(2) Grounds and reasons for the opinion on the Tender Offer” the Offeror,in late June 2023, appointed Nishimura & Asahi (Gaikokuho Kyodo Jigyo) as its legal advisor independent of the Offeror
Related Parties and the Company, and in early September 2023, appointed UBS Securities as its financial adviser
independent of the Offeror Related Parties and the Company, and it commenced specifically considering the Transactions(Initial Proposal). On September 1, 2023, the Offeror, together with MC and the Initial Partner Candidate, submitted awritten initial proposal regarding the Transactions (Initial Proposal) to the Company, and made a proposal to theCompany to take the Company Shares private with only the Offeror Related Parties and the Initial Partner Candidate as
the Company’s shareholders.
Since mid-September 2023, the Offeror Related Parties and the Initial Partner Candidate have commenced
consultations on specific matters with the Company toward the implementation of the Transactions (Initial Proposal).

44

In addition, since mid-October 2023, the Offeror Related Parties and the Initial Partner Candidate have consecutively
commenced due diligence on the Company.
After the Initial Partner Candidate provided the Company with official notice as of December 25, 2023, declining the
proposal regarding the Transactions (Initial Proposal), as a result of the consultations, the Offeror Related Parties
provided the Company with a written proposal on December 26, 2023, amending the initial proposal to change theTransactions (Initial Proposal) from a collaboration involving the privatization of the Company Shares by threecompanies (i.e., the Offeror Related Parties and the Initial Partner Candidate) to a collaboration involving theprivatization of the Company Shares by two companies (i.e., the Offeror Related Parties). Thereafter, the Offeror
Related Parties and the Company continued to consider the Transactions.
In addition, based on the results of due diligence on the Company conducted from mid-October 2023 to late January2024, with respect to the Tender Offer Price, the Offeror made the Initial Proposal in writing to the Company on
December 26, 2023, setting the Tender Offer Price per Company Share at 8,650 yen, the Share Option Price at 1 yen,and the Tender Offer Price per Company Share relating to American Depositary Shares, represented by American
Depositary Receipts, at 8,650 yen. In response to the Initial Proposal, the Offeror received a request from the Company
on December 27, 2023 to consider revising the Tender Offer Price, considering the interests of the Company’s minority
shareholders.
In response to that request, the Offeror made the Second Proposal in writing to the Company on January 4, 2024, setting
the Tender Offer Price per Company Share at 9,000 yen, the Share Option Price at 1 yen, and the Tender Offer Price perCompany Share relating to American Depositary Shares, represented by American Depositary Receipts, at 9,000 yen.
In response to the Second Proposal, the Offeror received a request from the Company on January 6, 2024 to once again
consider revising the Tender Offer Price, considering the interests of the Company’s minority shareholders.
In response to that request, the Offeror made the Third Proposal in writing to the Company on January 11, 2024, setting
the Tender Offer Price per Company Share at 9,500 yen, the Share Option Price at 1 yen, and the Tender Offer Price perCompany Share relating to American Depositary Shares, represented by American Depositary Receipts, at 9,500 yen.
In response to the Third Proposal, the Offeror received a request from the Company on January 12, 2024, to once again
consider revising the Tender Offer Price, considering the interests of the Company’s minority shareholders.
In response to that request from the Company, the Offeror made the Fourth Proposal in writing to the Company on
January 18, 2024, setting the Tender Offer Price per Company Share at 10,000 yen, the Share Option Price at 1 yen, andthe Tender Offer Price per Company Share relating to American Depositary Shares, represented by American Depositary
Receipts, at 10,000 yen. In response to the Fourth Proposal, the Offeror received a request from the Company on
January 24, 2024 to consider further raising the Tender Offer Price, considering the interests of the Company’s minority
shareholders and in light of the recent growth in the Company’s business results, including the details of the Company’s
Financial Results and the continued rise in the current stock price, for an opinion in favor of, and recommendation totender in, the Transactions.
In response to that request from the Company, the Offeror made the Fifth Proposal in writing to the Company on
January 26, 2024, setting the Tender Offer Price per Company Share at 10,200 yen, the Share Option Price at 1 yen, andthe Tender Offer Price per Company Share relating to American Depositary Shares, represented by American Depositary
Receipts, at 10,200 yen.

In response to the Fifth Proposal, the Offeror received a request from the Company on

January 28, 2024, to consider further raising the Tender Offer Price, considering the interests of the Company’s minority
shareholders, for an opinion in favor of, and recommendation to tender in, the Transactions.
In response to that request from the Company, the Offeror made the Sixth Proposal in writing to the Company on
January 29, 2024, setting the Tender Offer Price per Company Share at 10,290 yen, the Share Option Price at 1 yen, andthe Tender Offer Price per Company Share relating to American Depositary Shares, represented by American Depositary45

Receipts, at 10,290 yen. In response to the Sixth Proposal, the Offeror received a request from the Company on
January 29, 2024, to consider further raising the Tender Offer Price, with the aim of fully securing the interests of theCompany’s minority shareholders, and for an opinion in favor of, and recommendation to tender in, the Transactions.
In response to that request from the Company, the Offeror made the Seventh Proposal in writing to the Company on
January 30, 2024 setting the Tender Offer Price per Company Share at 10,350 yen , setting the Share Option Price at
1 yen, and setting the Tender Offer Price per Company Share relating to American Depositary Shares represented byAmerican Depositary Receipts at 10,350 yen. In response to the Seventh Proposal, on January 31, 2024, the Offeror
received a request from the Company that the Offeror shall consider further raising the Tender Offer Price for the opinion
in support of, and recommendation to tender in, the Transactions from the perspective of fully securing the interests of
the Company’s minority shareholders.
In response to that request from the Company, the Offeror made the Final Proposal in writing to the Company on
January 31, 2024 setting the Tender Offer Price per Company Share at 10,360 yen, setting the Share Option Price at
1 yen, and setting the Tender Offer Price per Company Share relating to American Depositary Shares represented byAmerican Depositary Receipts at 10,360 yen. In response to the Final Proposal, the Offeror received a response fromthe Company stating that it receives the Tender Offer Price in the Final Proposal as the maximum price that the Offeror
could offer and accepts the Tender Offer Price in the Final Proposal.
As a consequence of the above, the Offeror and the Company agreed on February 6, 2024, to set the Tender Offer Price
per Company Share at 10,360 yen, the Share Option Price at 1 yen, and the Tender Offer Price per Company Sharerelating to American Depositary Shares, represented by American Depositary Receipts, at 10,360 yen. According to
the Offeror, the Offeror also agreed with MC on February 6, 2024, to set the Tender Offer Price per Company Share at
10,360 yen, the Share Option Price at 1 yen, and the Tender Offer Price per Company Shares relating to American
Depositary Shares, represented by American Depositary Receipts, at 10,360 yen.
Now that the Offeror has confirmed that all of the Conditions Precedent had been satisfied, the Offeror has decided
today to commence the Tender Offer on March 28, 2024. With respect to the Tender Offer Price, there is no change tothe following: the Tender Offer Price per Company Share shall be 10,360 yen, the Share Option Price shall be 1 yen, theTender Offer Price per Company Share relating to American Depositary Shares, represented by American Depositary
Receipts, shall be 10,360 yen.
(Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer
Price and measures to avoid conflicts of interest)
As described in “(II) Background, purposes and decision-making process leading to the Offeror Related Parties’
decision to conduct the Tender Offer” in “(2) Grounds and reasons for the opinion on the Tender Offer” above, theCompany is a consolidated subsidiary of MC, which is one of the Offeror Related Parties, and in the Transactions,
including the Tender Offer, the Offeror Related Parties and the Company implemented the measures set forth in (i) to(x) below with a viewpoint to ensuring the fairness of the Tender Offer from the Tender Offer stage, eliminating
arbitrariness in decision-making concerning the Transactions, securing the fairness, transparency, and objectivity of thedecision-making process, and avoiding any doubt of a conflict of interest.
(i) Procurement of a share valuation report from an independent third-party valuator retained by the Offeror;(ii) Establishment of independent special committee at the Company and procurement of a report from thespecial committee;(iii) Advice from an independent legal advisor by the Company;(iv) Procurement of a share valuation report from an independent financial advisor and third-party valuatorretained by the Company;

46

(v) Advice from an independent legal advisor by the Special Committee;(vi) Procurement of a share valuation report and the Fairness Opinion from an independent third-party valuatorretained by the Special Committee;(vii) Establishment of independent review system at the Company;(viii) Receipt of unanimous approval of all disinterested directors of the Company and the opinion of all
disinterested auditors of the Company that they have no objection;(ix) Establishment of measures to secure purchase opportunities from other purchasers; and(x) Establishment of measures to ensure opportunities for the Company’s shareholders to make an appropriate
decision on whether to tender their shares in the Tender Offer.
(4) Possibility of delisting and reason therefor
The Company Shares are listed on the Prime Market of the TSE as of today. Because the Offeror has not set a
maximum number of shares to be purchased in the Tender Offer, the Company Shares may become delisted through theprescribed procedures in accordance with the TSE’s delisting criteria depending on the results of the Tender Offer.
In addition, even if such delisting criteria are not met as at the time of successful completion of the Tender Offer, incase where the Tender Offer is successfully completed, a series of procedures is planned to be implemented so that theOfferor Related Parties will be the only shareholders of the Company, as described in “(5) Policies on organizational
restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)” below. Therefore, in such cases,
the Company Shares will be delisted through the prescribed procedures in accordance with the TSE’s delisting criteria.
After the delisting of the Company Shares, the Company Shares may no longer be traded on the Prime Market of the
TSE.
For the reasons for delisting and the impact on minority shareholders and the opinions thereon, please refer to “(II)Background, purposes and decision-making process leading to the Offeror Related Parties’ decision to conduct theTender Offer” in “(2) Grounds and reasons for the opinion on the Tender Offer” above and “(5) Policies on organizational
restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)” below.
(5) Policies on organizational restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)
If the Offeror is unable to acquire all of the Company’s Share Certificates in the Tender Offer, the Offeror Related
Parties plans to implement a series of procedures to make the Offeror Related Parties the only shareholders of theCompany through the method described below following the successful completion of the Tender Offer.
Specifically, the Offeror jointly with MC plans to request that the Company convene an extraordinary shareholders’meeting (the “Extraordinary Shareholders’ Meeting”), at which the matters for resolution shall include consolidation of
the Company Shares (the “Share Consolidation”), and on the condition that the Share Consolidation takes effect, a partial
amendment of the articles of incorporation to abolish the provision concerning the share unit number. In addition, theOfferor jointly with MC plans to request that the record date of the Extraordinary Shareholders’ Meeting be a date close
to the commencement of the settlement of the Tender Offer. Each of the Offeror Related Parties intend to vote in favorof each of the above proposals at the Extraordinary Shareholders’ Meeting. If the proposal for the Share Consolidation
is approved at the Extraordinary Shareholders’ Meeting, then on the date on which the Share Consolidation takes effect,
the shareholders of the Company will hold the Company Shares in the number corresponding to the Share Consolidation
ratio approved at the Extraordinary Shareholders’ Meeting. If any fraction of less than one share results from theimplementation of the Share Consolidation, an amount in cash equal to the purchase price to be obtained by selling to
the Offeror the Company Shares equivalent to the total number of such fractional shares will be delivered to theshareholders in accordance with the procedures provided in Article 235 of the Companies Act and other relevant laws

47

and regulations. With respect to the purchase price of the Company Shares equivalent to such total number of fractional
shares, it is scheduled to be set in such a way so that, as a result of selling these shares, the amount of money to bedelivered to the Company shareholders who did not tender in the Tender Offer (however, excluding the Offeror Related
Parties and the Company) will be the same as the price obtained by multiplying the Tender Offer Price for the Company
Shares by the number of Company Shares held by each such shareholder. After the above process, a court petition to
obtain permission for a voluntary sale will be filed. The Offeror intends to request together with MC that the Company
use the Consolidation Ratio as the ratio of the Share Consolidation. The Consolidation Ratio will be determined suchthat the number of Company Shares held by Company shareholders who did not tender in the Tender Offer (excluding
the Offeror Related Parties) will be a fraction of less than one share so that the Offeror Related Parties will hold all of
the Company Shares.
The Company Shares subject to the Share Consolidation include the Company Shares represented by American
Depositary Receipts and held by the Depositary Bank. Therefore, if the above determination is made, the number ofCompany Shares held by the Depositary Bank after the Share Consolidation is also expected to be a fraction of less than
one share. In this case, according to the American Depositary Receipts Notifications, each of the Depositary Banks
may cancel the American Depositary Receipts and deliver to each holder of such American Depositary Receipts a
portion of the cash received by the Depositary Bank (converted into U.S. dollars) in accordance with the number ofAmerican Depositary Shares represented by the American Depositary Receipts held by such holder after deducting
Depositary Bank’s fees and applicable taxes, in accordance with the provisions stated in the American Depositary
Receipts.
As for provisions that aim to protect the rights of minority shareholders in connection with the above, the Companies
Act provides that if fractional shares of less than one share are created as a result of the Share Consolidation, then theshareholders of the Company may request that the Company purchase all of the fractional shares less than one share thatthey hold at a fair price in accordance with Articles 182-4 and 182-5 of the Companies Act and other relevant laws andregulations and may file a court petition to determine the price of the Company Shares. The court will eventually
determine the purchase price per share via this method.
If a holder of American Depositary Receipts intends to make a share purchase demand and a petition for thedetermination of the price, such holder required to make a share purchase demand and a petition for determination of
the price in accordance with Articles 182-4 and 182-5 of the Companies Act and other relevant laws and regulations
following the delivery of such holder’s American Depositary Receipts to the Depositary Bank and receipt by such holderof the corresponding Company Shares deposited with the Depositary Bank.
If the Tender Offer is successfully completed, but not all of the Share Options have been tendered and purchased in
the Tender Offer and such Share Options are not exercised and remain outstanding, the Offeror Related Parties plan torequest that the Company implement reasonably necessary procedures for the execution of the Transactions, such asrecommending that the Share Option Holders forfeit their Share Options. If the Company receives such a request, theCompany intends to cooperate with such request promptly after the settlement commencement date of the Tender Offer.
The procedures above may take time to implement, and the implementation method may change, depending on thesituation, such as the amendment, effectuation, and interpretation by the authorities of relevant laws and regulations.
Even in such a case, if the Tender Offer is successfully completed, the method of eventually delivering money to theCompany shareholders who did not tender in the Tender Offer will be adopted, and in such case, the amount of money
delivery to the Company’s shareholders will be calculated to be equal to the Tender Offer Price multiplied by the numberof Company Shares held by the shareholders of the Company. In such cases, the amount of money to be delivered to
the Depositary Banks in respect of the Company Shares represented by American Depositary Receipts and held by the
Depositary Banks will be the same. According to the American Depositary Receipts Notifications, the Depositary48

Banks may cancel the American Depositary Receipts and deliver to each holder of such American Depositary Receipts
a portion of the cash received by the Depositary Bank (converted into U.S. dollars in accordance with the number ofCompany Shares represented by the American Depositary Receipts held by such holder after deducting Depositary
Bank’s fees and applicable taxes.
For the specific procedures and time of implementation of the above, the Offeror will consult with the Company, andthe Company will promptly announce the details once they have been determined.
(6) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price andmeasures to avoid conflicts of interest
As of today, the Company is a consolidated subsidiary of MC, who is also one of the Offeror Related Parties, and inlight of the fact that the Transactions, including the Tender Offer, falls under the category of transactions in which there
are structural conflict of interest issues and information asymmetry issues with minority shareholders, in the Transactions,
including the Tender Offer, the Offeror Related Parties and the Company implemented the measures in (I) through (X)below with a view to ensuring the fairness of the Tender Offer from the Tender Offer stage, eliminating arbitrariness indecision-making concerning the Transactions, securing the fairness, transparency, and objectivity of the decisionmaking process, and avoiding any doubt of a conflict of interest.

Among the descriptions below, the measures

implemented by the Offeror Related Parties are based on the explanations received from the Offeror Related Parties.
Since the Offeror Related Parties hold 52,260,100 shares of the Company Shares in total (Shareholding Ratio:
52.16%) as of today, the Offeror believes that setting a minimum number of the “Majority of Minority” in the Tender
Offer would destabilize the successful completion of the Tender Offer, which in turn might not serve the interests ofminority shareholders who wish to tender in the Tender Offer, and it has not set a minimum number of the “Majority of
Minority” in the Tender Offer.

However, since the Offeror Related Parties and the Company implemented themeasures in (I) through (X) below, the Offeror believes that due consideration was given to the interests of theCompany’s minority shareholders.
(I) Procurement of a share valuation report from an independent third-party valuator retained by the Offeror
To ensure the fairness of the Tender Offer Price, the Offeror, in determining the Tender Offer Price, requested UBS
Securities as its financial adviser to be its third-party valuator independent of the Offeror Related Parties and the Company
to calculate the value of the Company Shares. UBS Securities does not constitute the Offeror Related Parties or theCompany’s related parties and has no material interest in the Transactions including the Tender Offer. In addition, as theOfferor takes each measures of this (I) and (II) and (X) below, and considers and decides the Tender Offer Price throughthe discussion and negotiation with the Company, the Offeror has not obtained an opinion concerning the fairness of theTender Offer Price (fairness opinion) from UBS Securities.
For details of the Share Valuation Report (UBS Securities) retained by the Offeror from UBS Securities, refer to “(III)Procurement of a share valuation report from an independent third-party valuator retained by the Offeror” in “(3) Mattersrelated to calculation” above.
(II) Establishment of independent special committee at the Company and procurement of a report from the special
committee(i) Background of establishment, etc.
As described in “(IV) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer
by the Company” in “(2) Grounds and reasons for the opinion on the Tender Offer” above, the Company established theSpecial Committee by a resolution at the Company’s board of directors meeting held on September 13, 2023. Prior to49

the establishment of the Special Committee, the Company, in a position independent of the Offeror Related Parties, inorder to establish a system to consider, negotiate, and make decisions regarding the Transactions from the viewpoint ofenhancing the Company’s corporate value and securing the interests of the Company’s minority shareholders, with theadvice from Anderson Mori & Tomotsune, has, since early September, 2023, individually explained to all of theCompany’s independent outside directors and independent outside corporate auditors who have no material interest in
the Offeror Related Parties and the Transactions that the Company has received the initial proposal on the Transactions(Initial Proposal) and that, since the Transactions are transactions that has structural conflict of interest issues andinformation asymmetry issues with minority shareholders, in considering and negotiating the Transactions, it isnecessary to take sufficient measures to ensure the fairness of the terms and conditions of the Transactions, including
the establishment of the special committee. In parallel, the Company also considered the candidates for the membersof the Special Committee, with advice from Anderson Mori & Tomotsune. After confirming that the candidates forthe members of the Special Committee are independent from the Offeror Related Parties and that they do not have any
material interests that differ from those of minority shareholders with respect to the success or failure of the Transactions,the Company, in consultation with the above independent outside directors and independent outside corporate auditorsof the Company, and with the advice from Anderson Mori & Tomotsune, has selected three members, Ms. Miki Iwamura,
Ms. Satoko Suzuki, and Ms. Yuko Gomi as candidates for the members of the Special Committee in order to ensure abalance of knowledge, experience, and ability of the Special Committee as a whole and to constitute the Special
Committee of an appropriate size. (The members of the Special Committee have not been changed since its
establishment. In addition, the compensation for the members of the Special Committee shall be a fixed amount inconsideration for their duties, regardless of the details of the report, and no performance fee is adopted.)On that basis, as described in “(IV) Decision-making process leading to and grounds for the opinion in favor of theTender Offer by the Company” in “(2) Grounds and reasons for the opinion on the Tender Offer” above, the Company
established the Special Committee by a resolution at the Company’s board of directors meeting held on September 13,
2023 and has consulted with the Special Committee on the Matters for Consultation.
In addition, upon establishing the Special Committee, the Company’s board of directors has resolved (a) that, in
considering the matters for consultation, the special committee may use the Company’s advisors with respect to theTransactions, and may retain a third-party institution, etc. to conduct the valuation of the Company’s shares, theprovision of the fairness opinion with respect to the Transactions and other matters that the special committee deems
necessary, and in such case, the Company shall bear the reasonable costs of such service, (b) that the decision of theCompany’s board of directors regarding the Transactions shall be made with the utmost respect for the judgment of thespecial committee, and in particular, if the special committee determines that the terms and conditions of the Transactions
are not appropriate, the Company’s board of directors shall not opine in favor of the Transactions under such terms andconditions, (c) that the special committee shall be authorized to request the Company’s directors, employees, and otherpersons deemed necessary by the special committee to attend special committee meetings and request explanations ofnecessary information in order to ensure the committee’s appropriate decisions, and (d) that the special committee shallbe authorized to be in substance involved in the process of negotiations concerning the terms and conditions of theTransactions by confirming in advance the Company’s plan on negotiation concerning the terms and conditions of theTransactions, receiving reports from the Company on the status of negotiation in a timely manner, stating its opinions
and giving instructions and requests to the Company, and, if necessary, to negotiate directly on its own.
At the above meeting of the Company’s board of directors, the Company’s three directors (namely Mr. Sadanobu
Takemasu, Ms. Miki Iwamura, and Ms. Satoko Suzuki), excluding two directors (Mr. Masayuki Itonaga and Mr.
Kiyotaka Kikuchi) out of five directors of the Company deliberated and unanimously passed the above resolutions. At
the above meeting of the Company’s board of directors, all five corporate auditors expressed their opinion that they had

50

no objection to the above resolutions. Furthermore, since Mr. Masayuki Itonaga concurrently served as an officer of
Mitsubishi Corporation Financial & Management Services(Japan)Ltd., a subsidiary of MC, until April1, 2022, and Mr.
Kiyotaka Kikuchi concurrently serves as an executive vice president of MC, they did not attend the above meeting of
the Company’s board of directors and refrained from expressing their opinions from the viewpoint of eliminating as
much as possible the possibility of being affected by the structural conflict of interest issues and information asymmetryissues in the Transactions. On the other hand, although Mr. Sadanobu Takemasu is originally from MC, it has been
more than 9 years since he transferred from MC to the Company, and he is not in a position to receive instructions fromthe Offeror Related Parties, nor is he involved in any way in the Transactions from the Offeror Related Parties’ side, nor
is he in a position to be so involved. Therefore, the Company has found no conflict of interest with respect to theCompany’s decision-making in the Transactions, and he has participated in the deliberations and resolution at the above
meeting of the Company’s board of directors.
(ii) Background of the consideration
The Special Committee was held a total of 22 times during the period from September 13, 2023 to February 5, 2024
for a total of approximately more than 22 hours and performed its duties related to the Matters for Consultation byreporting, sharing information, deliberating, making decisions, etc.
The Special Committee has confirmed that there is no problem with the independence and expertise of SMBC Nikko
Securities, a financial advisor and third-party valuator of the Company, and has approved its appointment of Anderson
Mori & Tomotsune, a legal advisor of the Company, after confirming that it does not constitute a related party of theOfferor Related Parties and the Company and that it has no material interest in the Transactions including the Tender
Offer. In addition, the Special Committee approved the appointment of Daiwa Securities as a financial advisor and athird-party valuator of the Special Committee after confirming that it has no problem with the independence andexpertise, and approved the appointment of Nakamura, Tsunoda & Matsumoto, a legal advisor of the Special Committee,
after confirming that it does not constitute a related party of the Offeror Related Parties and the Company and that it has
no material interest in the Transactions including the Tender Offer. Furthermore, the Special Committee has confirmedthat there are no problems from the viewpoint of independence and fairness with the review system of the Transactions(including the scope of the Company’s directors, officers and employees involved in the consideration, negotiation, anddecision-making regarding the Transactions and their duties) that the Company has established internally as describedin “(VII) Establishment of independent review system at the Company” below.
The Special Committee then considered the measures to be taken to ensure the fairness of the procedures in theTransactions, based on the opinions heard from Nakamura, Tsunoda & Matsumoto. In addition, while taking into
consideration the advice received from Daiwa Securities, the Special Committee has received an explanation from theCompany regarding the details, material conditions precedent, and background of the preparation of the Business Plan
prepared by the Company, and has confirmed the reasonableness of these matters and approved it.
The Special Committee received an explanation from the Company on the purpose and significance of theTransactions and its impact on the Company’s business, and conducted a question-and-answer session on these points,
and presented questions to the Offeror Related Parties, and conducted a question-and-answer session in the form ofinterviews with the Offeror Related Parties about the purpose and background of the Transactions, the management
policy after the Transactions, etc.
Furthermore, as described in “(II) Procurement of a share valuation report from an independent third-party valuatorretained by the Special Committee” in “(3) Matters related to calculation” above, Daiwa Securities conducted thevaluation of the Company Shares based on the Business Plan, and the Special Committee received an explanation of thevaluation methods used by Daiwa Securities for the valuation of the Company Shares, the reasons for adopting such

51

valuation methods, the details of the valuation using each valuation method, and the material conditions precedent, andconfirmed the reasonableness of these matters through a question-and-answer session, deliberation, and examination.
In addition, the Special Committee was informed of the Company’s negotiations with the Offeror from time to timeby the Company and SMBC Nikko Securities, deliberated and considered them, and provided necessary opinions
regarding the Company’s negotiation policy as appropriate.

Specifically, upon receipt of the Offeror’s proposal

regarding the Tender Offer Price, the Special Committee was soon informed of each proposal, heard analyses andopinions from SMBC Nikko Securities and Daiwa Securities regarding the response policy and the negotiation policy
with the Offeror, and considered the proposal based on advice from a financial standpoint received from Daiwa
Securities.

On that basis, the Special Committee was involved in the overall discussion and negotiation process

between the Company and the Offeror regarding the terms and conditions of the Transactions including the Tender Offer
Price, by providing the Company with opinions on matters to be discussed with the Offeror in order to achieve thesignificance and purpose of the Transactions as the Company. As a result, the Company received a proposal from theOfferor on January 31, 2024, which included a proposal to set the Tender Offer Price at 10,360 yen per share, andconsequently, the Company has received a total of 8 proposals, increasing the price by 19.77% from the initial priceproposal.
Furthermore, the Special Committee has received explanations multiple times from Anderson Mori & Tomotsune
and Nakamura, Tsunoda & Matsumoto regarding the details of the draft of the Company’s Press Release dated February
6, 2024 regarding the Tender Offer to be announced or submitted by the Company, and has confirmed that appropriate
information will be disclosed.
(iii) Details of the Decision
Based on the above background, and taking into consideration the legal advice received from Nakamura, Tsunoda &Matsumoto, the advice received from Daiwa Securities, and the details of the Share Valuation Report (Daiwa Securities)
and the Fairness Opinion submitted to the Special Committee as of February 5, 2024, the Special Committee carefully
considered and discussed the Matters for Consultation. As a result, the committee members unanimously submitted
to the Company’s board of directors the following summary of the Report dated February 5, 2024 as of February 5,
2024.
(a)

Details of the report
1. It is considered that the Transactions will contribute to the enhancement of the Company’s corporate value,
and the purpose thereof is justified and reasonable.
2. It is considered that the fairness and appropriateness of the terms and conditions of the Transactions(including the offer price in the Tender Offer) are ensured.
3. It is considered that sufficient consideration has been given to the interests of the shareholders of theCompany through fair procedures in the Transactions.
4. It is appropriate for the board of directors to express its opinion in favor of the Tender Offer and recommendthat the shareholders of the Company tender their shares in the Tender Offer, that it recommends that theholders of American Depositary Receipts in respect of the Company Shares tender in the Tender Offer by
delivering their American Depositary Receipts to the Depositary Bank in advance and receiving deliveryof the Company Shares related to American Depositary Shares represented on the American Depositary
Receipts, and that it leaves the decision to each of the Share Option Holders whether or not to tender inthe tender offer in respect of the share options.
5. In addition to 1 through 4 above, the decision to enter into the Transactions would not be disadvantageous to52the minority shareholders of the Company.
(b)

Reasons for report
1. Opinions to Matters for Consultation (i) (whether the purpose of the Transactions is justified and reasonable(including whether the Transactions will contribute to the enhancement of the Company’s corporate value))
Based on the following points, with respect to the Matters for Consultation (i), it is considered that theTransactions will contribute to the enhancement of the Company’s corporate value and the purpose of theTransactions are justified and reasonable.
A. The Company’s projected synergies
It was explained that the following points could be expected as synergies from the Transactions:(I) Accelerating the transformation to “Real x Tech Convenience” through the use of management
resources･ The Company is taking full advantage of Tech to take on the world’s fastest delivery service (Quickest
E Commerce service: QEC), by utilizing stores as e-commerce centers.
･ The Transactions are expected to accelerate the transformation to “Real x Tech Convenience” bymaking advancements in QEC that can provide products to customers the fastest in the convenience
store industry, by strengthening the technology system including system development through thedispatch of human resources such as engineers from the Offeror, and strengthening the digital marketingsystem by utilizing the Offeror’s customer base and big data of high-resolution location informationthat only a telecommunications carrier can provide.
(II) Strengthening profitability by sharing the customer base･ The Transactions are expected to leverage the Offeror Group’s customer base of about 31 million
customers and promote high-resolution marketing initiatives.
･ Specifically, in addition to expanding consumer reach and customer attraction by attracting newcustomers from the Offeror Group’s economic zone and sending customers to individual stores byutilizing location information, by creating new value in the app and membership domains through thedevelopment and provision of new services, and maximizing the value of data through one-stop
processing of rich big data collection, aggregation, analysis, and visualization, it becomes possible toconsider promotion of cross-selling and development of new businesses and services, leading to the
expansion of marketing business.
(III) Coexistence with local communities through provision of social infrastructure utilizing cutting-edge
technology･ The Transactions are expected to provide services that support various aspects of daily life, thereby
innovating daily life experiences and behaviors in the wake of technological advancements and solvingsocial issues.
･ Specifically, for example, the utilization of the Offeror Group’s advanced drone technology can be
expected to solve issues related to such as depopulation and ageing of communities by improving theconvenience of consumers who are located in areas with no stores.
･ In addition, by utilizing the 5G network and satellite communications technology owned by the Offeror
which is a telecommunications carrier, it is expected that it will become possible to develop stores andoffer products through augmented reality and virtual reality linked to its own apps through metaverse
services, such as providing medical services including remote diagnosis by health checks based on vitalsensing.
(IV) Strengthening business foundation by utilizing management resources such as highly-skilled human53resources and know-how･ By promoting the exchange of human resources between the Offeror Group and MC Group and theCompany, and providing each other with human resources support including the secondment anddispatch of employees, such will enable countermeasures against normalization of labor shortages anddevelopment of human resources.
･ It is expected that the Company Group’s portfolio will be strengthened and synergies will be maximizedby the utilization of the Offeror Group’s know-how in financial businesses, collaboration in theentertainment field, and the continued sharing of MC Group’s global network.
(V) Strengthening collaboration in the environmental field to realize a decarbonized society･ The implementation of the Transactions will make it possible to further strengthen and accelerate green
and sustainable initiatives in order to achieve the goals of the environmental vision “Lawson Blue
Challenge 2050!” set by the Company.
･ Specifically, for example, by utilizing the capabilities of the Offeror Group and the MC Group, it isexpected that such can promote for example the utilization of renewable energy generated by solar
panels, facilitation of the purchase of discounted foods near their expiration dates by making use of vast
amounts of location and purchasing information data, as well as the replacement of plastic containers
and plastic bottles with biomass materials.
(VI) Growth of group company businesses･ In retail financial business, the collaboration of financial know-how that MC and the Offeror Grouppossess, including fintech, is expected.
･ In the entertainment business also, it is considered that the content and digital tech capabilities that MC
and the Offeror Group possess will accelerate the Company’s growth.
･ Smart digital capabilities and global expansion capabilities are also essential in the Company’s
supermarket and overseas businesses, and it is considered that collaboration with the two companies
will accelerate the growth of these businesses.
(VII) Reducing listing maintenance costs and administrative burden and reallocating resources･ The privatization of the Company’s shares through the Transactions will allow resources to be allocatedto the various significant initiatives outlined above, while avoiding the increase in human and economic
costs associated with maintaining the Company’s listing which has been pointed out in recent years.
B. Alternative transactions･ It is considered that there are no transactions in particular that could be an alternative to the Transactionsin terms of enhancing corporate value.
C. Consistence between the Company’s explanation of synergies and the explanation by the Offeror Related
Parties･ The Special Committee also asked the Offeror Related Parties substantially the same questions regarding
the Transactions as it did to the Company, in order to confirm whether there was any discrepancy inunderstanding between the parties to the Transactions.
･ As a result, not only were there no responses of the Offeror Related Parties that contradicted with theCompany’s responses, but also, even taking into consideration the Offeror’s understanding as set forth in
the Company’s Press Release dated February 6, 2024, no discrepancy was found between the Company’s
understanding regarding the synergies expected from the Transactions.
2. Opinions to Matters for Consultation (iii) (whether sufficient consideration is given to the interests of the54

shareholders of the Company through fair procedures in the Transactions)
Based on the following points, it is considered that sufficient consideration has been given to theinterests of the shareholders of the Company through fair procedures in the Transactions:
A. Establishment of a special committee･ Considering the establishment and operation of the special committee as described below, the Special
Committee is considered to be functioning effectively as a measure to ensure fairness.
(I) The Special Committee is established before the terms of the transaction are determined between theOfferor and the Company.
(II) The Special Committee consists solely of outside directors who are considered most qualified to serveon the Special Committee under the “Fair M&A Guidelines” dated June 28, 2019 prepared by the
Ministry of Economy, Trade and Industry (“M&A Guidelines”), and outside corporate auditors who are
considered qualified to complement the outside directors.
(III) When the Company discusses the Tender Offer Price with the Offeror, it requires confirmation fromthe Special Committee in advance or promptly after the fact. This ensures that the Special Committee
is in a position that may substantially influence the negotiation process regarding the terms of thetransaction, by receiving timely reports on the status of the negotiations, expressing its opinion on
important aspects, and issuing instructions and requests to the Company.
(IV) The Special Committee, after considering the independence, expertise and track records of thecandidates for several legal advisors and financial advisors and third-party valuators, on September 13,
2023, appointed Nakamura, Tsunoda & Matsumoto as its own legal advisor independent of theCompany and the Offeror Related Parties, and on the same day, appointed Daiwa Securities as its own
financial advisor and third-party valuator independent of the Company and the Offeror Related Parties,
and has made examinations and judgments based on expertise in the fairness of the procedures and in
the evaluation of corporate value.
(V) The Special Committee has obtained, on behalf of the minority shareholders, important information
including the draft text of the agreement to be entered into by the Company in relation to the Transactions
and has made examinations and judgments based on such information, since it is difficult to disclose alldetails of the contemplated agreements and potential synergies for the Transactions to the public due tosuch being so wide-ranging.
(VI) The board of directors of the Company has resolved that, when making a resolution on the mattersfor consultation to the Special Committee, the decision-making of the board of directors of the Company
regarding the Transactions shall be made with the utmost respect for the Special Committee’s judgment
and, especially, if the Special Committee deems the transaction terms regarding the Transactions to beinappropriate, then the board of directors of the Company shall not approve the Transactions under suchtransaction terms.
B. Decision-making process in the Company･ In the Company, it is expected that the Tender Offer will be deliberated and resolved by three directors(namely Mr. Sadanobu Takemasu and Ms. Miki Iwamura and Ms. Satoko Suzuki, who are members of
the Special Committee) excluding Mr. Masayuki Itonaga and Mr. Kiyotaka Kikuchi, who are officers andemployees of MC or its subsidiaries that are Offeror Related Parties.
･ Although one of the directors of the Company, Mr. Sadanobu Takemasu, President and CEO, is a former
employee of MC, as (a) the M&A guidelines also provide that if an independent special committee has
been established and is functioning effectively, it would suffice to exclude persons who currently

55

concurrently serve as officers and employees of the Offeror, (b) the period of time since his transfer fromMC to the Company is sufficiently long, (c) Mr. Sadanobu Takemasu, as President and CEO of theCompany, has the knowledge and experience that is indispensable and irreplaceable when considering andnegotiating the Transactions from the viewpoint of enhancing the corporate value of the Company, and (d)taking into account the advice of Anderson Mori & Tomotsune, the legal advisor of the Company, andNakamura, Tsunoda & Matsumoto, the independent legal advisor of the Special Committee, from theviewpoint of independence and fairness, there is no problem with his participation in the examination of
the Transactions and the negotiation with the offeror.
･ Based on the above, it is considered that there is nothing questionable about the fairness of the decisionmaking process in the Company.
C.

Obtaining professional advice from outside experts(I) Obtaining advice from legal advisors･ The Company's board of directors receives advice on decision-making from its legal advisors, Anderson
Mori & Tomotsune. The Company is considered to have obtained independent advice from its legal
advisors.
(II) Obtaining a share valuation report from an independent third-party valuation service provider･ To ensure the fairness of the Tender Offer Price, the Company's board of directors obtained Share
Valuation Report (SMBC Nikko Securities) from SMBC Nikko Securities, an independent third-party
valuation service provider, as a reference for the value of the Company Shares.
･ In addition, in the Share Valuation Report (SMBC Nikko Securities), multiple calculation methods are
employed to avoid arbitrary calculation of the price. Furthermore, there is no indication of any arbitrary
action by the Offeror's officers or employees in the preparation of the Company's business plan, whichis the premise for such calculation, and there is no circumstance that would raise doubts about thefairness of the calculation.
The independence of SMBC Nikko Securities has been ensured.
･ The Special Committee also retained Daiwa Securities as its own financial advisor and third-party
appraiser in connection with review of the Transactions, and received the Share Valuation Report(Daiwa Securities) from Daiwa Securities as a reference for the value of the Company Shares.
･ The Special Committee has also confirmed Daiwa Securities' independence as an advisor (including
independence from Offeror Related Parties and the Company).
･ Based on the above, both Share Valuation Report (SMBC Nikko Securities) and Share Valuation Report(Daiwa Securities) are considered to be the share valuation reports prepared by independent third-party
valuation service providers.
(III) Obtaining Fairness Opinion･ In addition, in order to ensure the fairness of the Tender Offer Price, the Special Committee obtained
the Fairness Opinion from Daiwa Securities stating that the Tender Offer Price is fair from a financial
point of view to the Company's general shareholders, excluding the Offeror related Parties and theiraffiliates.
･ The Special Committee believes that the Fairness Opinion can be evaluated positively as a measure toensure fairness.
D. Market check･ It is stated in the Company’s Press Release dated February 6, 2024 that the Tender Offer period isscheduled to be set at 20business days, which is the shortest period required by law. The Tender Offer56

is a so-called pre-announcement type tender offer, and it is also stated that a relatively long period oftime is secured before the commencement of the Tender Offer. Considering such period, there is areasonable opportunity for other potential acquirers to make a counter takeover offer.
･ It is also acknowledged that there is no agreement including a transaction protection clause between the
Company and Offeror to restrict contact with competing takeover bidders.
Hence, in this case, a so-called indirect market check is being implemented by constructing anenvironment in which other Counter Offeror (as defined “Establishment of measures to ensure purchase
opportunities from other purchasers” below) can make counter-proposals after the announcement
before conducting the M&A.
E. Majority of Minority･ The concept of Majority of Minority is not adopted regarding the minimum number of shares to bepurchased.
･ It is admitted that many measures to ensure fairness other than the establishment of Majority of Minority
conditions have been adopted in the implementation of the Tender Offer. Therefore, the lack of adoptionof the Majority of Minority concept in the implementation of the Tender Offer itself does not necessarily
impede the fairness of the terms and conditions of the Transactions.
F. Enhancement of information provision to general shareholders and improvement of transparency ofthe process･ In the Company’s Press Release dated February 6, 2024, certain details regarding the Business Plan
have been disclosed which was used as a basis for the valuation by DCF Method in Share Valuation
Report (SMBC Nikko Securities) and Share Valuation Report (Daiwa Securities).
･ Finally, other information, such as the process leading to the implementation of the M&A and thebackground to the negotiations, is also deemed to be fully described in the Company’s Press Release
dated February 6, 2024.
G. Elimination of coerciveness･ The Squeeze-out Procedure in the Transactions will be implemented through reverse stock split scheme.
Shareholders are granted the right to file a petition for price determination pursuant to Articles 182-4
and 182-5 of the Companies Act, which is explicitly disclosed in the Company’s Press Release dated
February 6, 2024.
･ The Company’s Press Release dated February 6, 2024 also states that the Squeeze-out Procedure will
be conducted promptly after the closing of the Tender Offer and that, with respect to the money to bedelivered to the minority shareholders in the Squeeze-out Procedure, it will be equivalent to the Tender
Offer Price multiplied by the number of the Company Shares held by each such shareholder (excluding
the Company and the Offeror Related Parties).
･ Based on the above, it is acknowledged that measures to eliminate coercion are being taken with regard
to the Transactions.
3. Opinions to Matters for Consultation (ii) (whether the fairness and appropriateness of the terms andconditions of the Transactions (including the Tender Offer Price) are ensured)
A. Securing the negotiation process･ As for the actual negotiation process, the Tender Offer Price was fairly negotiated by the Company withthe advice of SMBC Nikko Securities, and the final agreement was concluded. The Special Committee
was also actively involved in the negotiations by providing its opinions on the negotiations at each57

meeting.
･ Under the above circumstances, the Company, referring to the above valuation calculated by SMBC
Nikko Securities and taking into consideration the deliberations of the Special Committee, conducted
multiple rounds of price negotiations before reaching a final agreement. The final Tender Offer Price(10,360 yen) was considerably higher than the price (8,650 yen) originally proposed by Offeror, and it
is observed that the Company negotiated the Transactions with the aim of making the terms andconditions of the Transactions as favorable as possible to the general shareholders.
･ In light of the above, it can be inferred that the agreement reached in the Transactions was based on
objective and consistent discussions between the Company and the Offeror, which were at arm's length,
and that there were no circumstances that raised doubts about the transparency or fairness of thedecision-making process.
B. Relationship between the share value calculation and the Tender Offer Price･ The Business Plan is considered to be reasonable from the viewpoint of the process and method of its
formulation, and no arbitrary pressure from Offeror Related Parties was found to have intervened in its
formulation due to the following:(I) Business plan･ The Business Plan admittedly is based on a business plan that was reviewed by the Special Committee
on the advice of the Special Committee's own advisors, Daiwa Securities and Nakamura, Tsunoda &Matsumoto, for its development and updating. As a result, no arbitrariness was found in the formulation
and revision.
･ It is not unreasonable that the Business Plan on a stand-alone basis is also used as the basis for the
calculation.
･ Furthermore, with regard to the formulation of the Business Plan, the "Challenge 2025" (the three-yearplan from FY2023 to FY2025) reported at the Company's board of directors meeting held on April 13,
2023, and the subsequent update of the business plan made in August 2023 are admitted to have been
prepared in the course of ordinary business operations unrelated to the Transactions, prior to the start ofconsideration of the Transactions, even though it is admitted that a person seconded from MC wasinvolved in the preparation. In addition, the two-year plan for FY2026 and FY2027, which was preparedafter the consideration of the Transactions started, was prepared without the involvement of Offeror
Related Parties, and is considered to have been prepared with the confirmation of Mr. Sadanobu
Takemasu, the president and representative director of the Company. Therefore, the involvement of theperson seconded from MC in the process of formulating the Business Plan cannot be considered to haveraised doubts about the fairness of the contents of the Business Plan.
･ In addition, with respect to the matters that the Company reviewed and considered in the process ofdeveloping the Business Plan and the feasibility of the future projections, Daiwa Securities, the Special
Committee's own financial advisor, asked the Company necessary questions and provided an opinion
that the Business Plan】 was not considered to be intentionally suppressed to lower the Company's
share valuation, and that there were no questionable points.
(II) Relationship between the share value calculation and the Tender Offer Price･ The Tender Offer Price of 10,360 yen per share exceeds the upper limit of the calculation result of themarket price method and within the range of the Company's per-share value calculated by the DCF
Method, which is considered to represent the intrinsic value of the Company's shares.

58

･ The Special Committee also believes that the Tender Offer Price is not disadvantageous to minority
shareholders in terms of comparison with the Company Shares valuation calculated by Daiwa Securities
and SMBC Nikko Securities.
(III) Examination of premium･ The Tender Offer Price is equal to the closing price of the Company Shares on the TSE on or before
February 5, 2024 (the "immediately preceding day") plus the premium of: 18.79% for the immediately
preceding day's closing price; 27.05% for the average closing price over a month before the immediately
preceding day; 37.31% for the average closing price over 3 months before the immediately precedingday; 42.62% for the average closing price over 6 months before the immediately preceding day.
･ In terms of the comparison of the premium level of the Tender Offer Price with other cases, the premium
level of the Tender Offer Price is considered that although it is lower than the average and median valueof which an M&A transaction announced after July 2019 after the publication of the M&A guidelines,
completed by December 31, 2023, with a market capitalization of 100 billion yen or more, and whosetarget stock is over PBR 1 times from before the announcement of the transaction, based on the closing
price of the previous day and the average closing price of the past month of the previous day (averageand median values based on the closing price of the previous day (31.74% and 30.24%); average andmedian premium values based on the closing price during the past month of the previous day (33.57%
and 34.98%)), it exceeds the average and median price of above eleven deals based on the averageclosing price for the past three months and six months (average and median premium values based on
the average closing price of the past three months of the previous day (35.17% and 34.09%), averageand median premium values based on the average closing price of the past six months of the previous
day (34.87% and 37.47%)).
C. Reasonableness of the scheme･ The scheme of the Transactions, in which the Offeror acquires all of the Company Shares (including
the American Depositary Receipts but excluding the Company Shares owned by the Offeror Related
Parties and the treasury shares owned by the Company) and Company Share Options and theCompany's minority shareholders are given the opportunity to recoup their investment by acquiring allof the Company's Share Certificates, is appropriate.
D. Reasonableness of the purchase price of Share Options･ Share Options are also included in the Tender Offer, but the purchase price for Share Options is set at 1yen.
･ According to the Company’s Press Release dated February 6, 2024, at the time of publication of theTender Offer, the Company intends to make a statement to the Share Option Holders that it will leave itto their judgement whether or not to tender their options in the Tender Offer.
･ In light of the above, the Special Committee withholds its opinion on the reasonableness of the price ofShare Options in the Tender Offer.
4.

Opinions to Matters for Consultation (iv) whether it can be considered appropriate for the Company’sboard of directors to express their opinions in favor of the Tender Offer, recommending that the shareholdersof the Company tender their shares in the Tender Offer, recommending that the owners of the American
Depositary Receipts deliver the American Depositary Receipts to the Depositary Banks in advance and receive
the delivery of the Company Shares related to the American Depositary Shares represented by the relevant
American Depositary Receipts to tender their shares in the Tender Offer, and leaving whether or not to tender59

their shares in the Tender Offer to the judgement of the Share Option Holders; and (v) in addition to (i) through(iv) above, whether it can be considered that conducting the Transactions is not disadvantageous to theCompany’s minority shareholders･ The Special Committee's deliberations resulted in the conclusion that there are no problems with any of
the Matters for Consultation (i) through (iii).
･ Accordingly, regarding the Matters for Consultation (iv) and (v), the Special Committee considers it isappropriate for the Company to express its opinion that the board of directors is in favor of the Tender
Offer and it recommends to the shareholders of the Company that they tender in the Tender Offer,recommends to the owners of American Depositary Receipts that they tender in the Tender Offer after
delivering the American Depositary Receipts to the Depositary Bank in advance and receiving the deliveryof the Company Shares concerning the American Depositary Shares that were represented on such
American Depositary Receipts, and leaves it to the Share Option Holders to decide whether to tender in
the Offer or not.
･ However, since the Tender Offer, which is the first phase of the Transactions, is expected to take areasonable period of time from the announcement to the start of the Tender Offer, the Special Committee
plans to conduct additional examinations on these points again at the start of the Tender Offer.
Subsequently, on February 21, 2024, the Company was informed by the Offeror that it expected that the Competition
Law Procedures will be completed by late March 2024, and assuming such expectation, it expected the Tender Offer tobe commenced on March 28, 2024.

Further, on March 22, 2024, the Company was informed by the Offeror that, as

the Competition Law Procedures have been completed, the Offeror intends to commence the Tender offer on March 28,
2024, subject to the satisfaction of the Conditions Precedent.
As the Tender Offer is planned to be commenced, on March 25, 2024, the Company requested the Special Committee
to consider whether or not the opinion expressed by the Special Committee to the board of directors of the Company asof February 5, 2024 has changed, and if it has not, to inform the board of the directors of the Company to that effect,
and if it has changed, to state its changed opinion.
In the 23th Special Committee held on March 25, 2024, the Special Committee confirmed to the Company that it has
examined whether or not there has been any material change in the circumstances that could have an impact on theTransactions since February 5, 2024 and studied the requested matters, and confirmed that it found no reason, which, inlight of the circumstances from February 5, 2024 to March 26, 2024, requires any change to the opinion expressed by
the Special Committee to the board of directors meeting of the Company on February 5, 2024, and submitted to theCompany the Report dated March 26, 2024 stating that, by a unanimous resolution of all members, the Special
Committee does not consider any change is necessary to the content of the report submitted by the Special Committee
to the board of directors meeting dated February 5, 2024.
(III) Advice from an independent legal advisor at the Company
As described in “(II) Establishment of independent special committee at the Company and procurement of a report fromthe special committee” above, the Company appointed Anderson Mori & Tomotsune as an external legal advisor
independent of the Offeror Related Parties and the Company and has received legal advice from Anderson Mori &Tomotsune, including advice on measures to be taken to ensure the fairness of the procedures in the Transactions, various
procedures of the Transactions, and the method and process of the Company’s decision-making regarding the Transactions.
Anderson Mori & Tomotsune does not constitute a related party of the Offeror Related Parties and the Company andhas no material interest in the Transactions including the Tender Offer. The Company has a legal advisory agreement

60with Anderson Mori & Tomotsune, which is an external law firm that provides legal services not only to the Company but
also to many other clients, and the Company, as one of the clients of the firm, has entered into a legal advisory agreement
to receive legal advice on a case-by-case basis based on the field and expertise required. The independence of the firmfrom the Company is not harmed by the existence of such an agreement, and the firm’s compensation is calculated bymultiplying the operating hours by the hourly rate, regardless of the success or failure of the Transactions, and does notinclude a performance fee subject to the successful completion of the Transactions.

Therefore, the Company has

determined that there is no problem with the firm’s independence from the Offeror Related Parties and the success or
failure of the Tender Offer. The Special Committee also confirmed at its first meeting that there are no problems with theindependence and competence of Anderson Mori & Tomotsune as the legal advisor.
(IV) Procurement of a share valuation reports from an independent financial advisor and a third-party valuator by theCompany
As described above in “(II) Establishment of independent special committee at the Company and procurement of areport from the special committee”, the Company appointed SMBC Nikko Securities as a financial advisor and third-party
valuator independent of the Offeror Related Parties and the Company, received advice and assistance from SMBC Nikko
Securities from a financial perspective, including advice on valuation of the Company Shares and negotiation policies with
the Offeror, and retained the Share Valuation Report (SMBC Nikko Securities) as of February 5, 2024.
SMBC Nikko Securities does not constitute a related party of the Offeror Related Parties and the Company and has nomaterial interest in the Transactions including the Tender Offer. In addition, the compensation to SMBC Nikko Securities
for the Transactions includes a performance fee to be paid subject to the successful completion of the Transactions or others.
Taking into account general practices in similar transactions and the compensation structure that would impose a reasonablefinancial burden on the Company in the event that the Transactions would be unsuccessful, the Company has determinedthat the inclusion of a performance fee to be paid on the condition that the Tender Offer is successful does not negate theindependence, and has therefore decided to appoint SMBC Nikko Securities as the Company’s financial advisor and thirdparty valuator in accordance with the above compensation structure.
(V) Advice from an independent legal advisor at the Special Committee
As described above in “(II) Establishment of independent special committee at the Company and procurement of areport from the special committee”, the Special Committee appointed Nakamura, Tsunoda & Matsumoto as its own legal
advisor independent of the Offeror Related Parties and the Company and has received legal advice from Nakamura,Tsunoda & Matsumoto, including advice on measures to be taken to ensure the fairness of the procedures in theTransactions, various procedures of the Transactions, and the method and process of the Company’s decision-making
regarding the Transactions.
Nakamura, Tsunoda & Matsumoto does not constitute a related party of the Offeror Related Parties and the Company
and has no material interest in the Transactions including the Tender Offer.

Nakamura, Tsunoda & Matsumoto’s

compensation is calculated by multiplying the operating hours by the hourly rate, regardless of the success or failure of theTransactions, and does not include a performance fee subject to the successful completion of the Transactions.
(VI) Procurement of a share valuation report and the Fairness Opinion from an independent third-party valuator by theSpecial Committee
As described in “(II) Establishment of independent special committee at the Company and procurement of a report fromthe special committee” above, the Special Committee appointed Daiwa Securities as a financial advisor and third-party
valuator independent of the Offeror Related Parties and the Company and received advice and assistance from Daiwa

61

Securities from a financial perspective, including advice on valuation of the Company Shares and negotiation policies with
the Offeror, and retained the Share Valuation Report (Daiwa Securities) as of February 5, 2024. The Special Committee
also retained an opinion concerning the fairness of the Tender Offer Price (fairness opinion) from Daiwa Securities as ofFebruary 5, 2024.
Daiwa Securities does not constitute a related party of the Offeror Related Parties and the Company and has no materialinterest in the Transactions including the Tender Offer. The compensation to Daiwa Securities for the Transactions
includes only the fixed fee to be paid regardless of the success or failure of the Transactions, and does not include a
performance fee to be paid subject to the successful completion of the Transactions.
(VII) Establishment of independent review system at the Company
As described in “(IV) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by
the Company” in “(2) Grounds and reasons for the opinion on the Tender Offer” above, the Company has established asystem internally to consider, negotiate, and make decisions regarding the Transactions from the standpoint of being
independent from the Offeror Related Parties, considering that the Transactions including the Tender Offer falls under the
category of transactions in which there are structural conflict of interest issues and information asymmetry issues withminority shareholders. Specifically, on September 1, 2023, after receiving the Transactions (Initial Proposal) from theOfferor Related Parties, the Company established a project team to consider the Transactions (including the preparation ofa business plan that will serve as the basis for the valuation of the Company’s shares) and to discuss and negotiate with theOfferor Related Parties. The members of the project team are composed only of the Company’s officers and employees
who do not concurrently serve as officers and employees of each of the Offeror Related Parties group (excluding Lawson
Group other than MC), and such treatment continues.
In addition, the Company’s review system (including the scope of the Company’s directors, officers and employees
involved in the consideration, negotiation, and decision-making regarding the Transactions and their duties) has been
approved by the Special Committee that there are no problems from the viewpoint of independence and fairness.
(VIII) Receipt of unanimous approval of all disinterested directors of the Company and the opinion of all disinterested
auditors of the Company that they have no objection
As described in “(IV) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by
the Company” in “(2) Grounds and reasons for the opinion on the Tender Offer” above, the Company’s board of directors
has carefully considered and discussed whether the Transactions, including the Tender Offer, will contribute to theenhancement of the Company’s corporate value and whether the terms and conditions of the Transactions, including theTender Offer Price, are appropriate, taking into consideration the legal advice received from Anderson, Mori andTomotsune, the advice received from SMBC Nikko Securities, and the details of the Share Valuation Report (SMBC Nikko
Securities), while respecting to the fullest extent the judgment of the Special Committee as presented in the Report dated
February 5, 2024.
As a result, as described in “(IV) Decision-making process leading to and grounds for the opinion in favor of the Tender
Offer by the Company” in “(2) Grounds and reasons for the opinion on the Tender Offer” above, since the Tender Offer
Price of 10,360 yen per share is a reasonable price that ensures the benefits that the Company’s minority shareholders
should enjoy and the other terms and conditions of the Tender Offer are fair, the Company has therefore determined that
the Tender Offer will provide the Company’s minority shareholders with a reasonable opportunity to sell the Company
Shares held by them at a price with an appropriate premium and, at the Company’s board of directors meeting held today,
as the Company's opinion as of the same date, the Company resolved to express its opinion in favor of the Tender Offer if
the Tender Offer is commenced, to recommend to the shareholders of the Company that they tender in the Tender Offer,62

to recommend to the owners of American Depositary Receipts that they tender in the Tender Offer after delivering theAmerican Depositary Receipts to the Depositary Bank in advance and receiving the delivery of the Company Sharesconcerning the American Depositary Shares that were represented on such American Depositary Receipts, and to leave itto the Share Option Holders to decide whether to tender in the Tender Offer or not.
Subsequently, on February 21, 2024, the Company was informed by the Offeror that it expected that the Competition
Law Procedures will be completed by late March 2024, and assuming such expectation, it expected the Tender Offer to becommenced on March 28, 2024. Further, on March 22, 2024, the Company was informed by the Offeror that, as theCompetition Law Procedures have been completed, the Offeror intends to commence the Tender offer on March 28, 2024,
subject to the satisfaction of the Conditions Precedent.
In response to this, on March 25, 2024, the Company requested the Special Committee to consider whether or not theopinion expressed by the Special Committee to the board of directors of the Company as of February 5, 2024 has changed,
and if it has not, to inform the board of the directors of the Company to that effect, and if it has changed, to state its changed
opinion, and received on March 26, 2024 the submission of the Report dated March 26, 2024 stating that the Special
Committee does not consider any change is necessary to the content of the report submitted by the Special Committee tothe board of directors meeting dated February 5, 2024.

Accordingly, the Company again carefully discussed andconsidered the contents of the terms and conditions of the Tender Offer in light of the contents of the Report dated March
26, 2024 as well as the Company’s business performance and changes in the market environment, etc. since the board of
directors meeting on February 6, 2024.
As a result, the Company still believes as of today that the Transactions will contribute to the enhancement of theCompany’s corporate value, and the purpose of the Transactions and the meaning and necessity of achieving such purpose
have only been enhanced and never decreased, and that there are no factors that would change the Company’s decision
about the Tender Offer as of February 6, 2024. Therefore, the Company again resolved at its board of directors meeting
held today, that it shall express its opinion in favor of the Tender Offer and recommend that the Company’s shareholders
tender their shares in the Tender Offer, that it recommends that the owners of the American Depositary Receipts tender in
the Tender Offer after delivering their American Depositary Receipts to the Depositary Bank in advance and receiving
delivery of the Company Shares related to American Depositary Shares represented on the American Depositary Receipts,
and that it leaves the decision to the Share Option Holders whether or not to tender in the Tender Offer. The Company
also reported to the Offeror today that, as of today, there are no undisclosed material facts concerning the Company’sbusinesses or undisclosed facts relating to the implementation of tender offers, etc. concerning the Company’s Share
Certificates.
At the both meetings of the Company’s board of directors above, the Company’s three directors (namely Mr. Sadanobu
Takemasu, Ms. Miki Iwamura, and Ms. Satoko Suzuki), excluding two directors (Mr. Masayuki Itonaga and Mr. Kiyotaka
Kikuchi) out of five directors of the Company deliberated and unanimously passed the above resolutions. At the both
meetings of the Company’s board of directors above, all five corporate auditors expressed their opinion that they had noobjection to the above resolutions.
Furthermore, since Mr. Masayuki Itonaga concurrently served as an officer of Mitsubishi Corporation Financial &Management Services(Japan)Ltd., a subsidiary of MC, until April1, 2022, and Mr. Kiyotaka Kikuchi concurrently serves
as an executive vice president of MC, they did not attend the above meeting of the Company’s board of directors andrefrained from expressing their opinions from the viewpoint of eliminating as much as possible the possibility of being
affected by the structural conflict of interest issues and information asymmetry issues in the Transactions. On the other
hand, although Mr. Sadanobu Takemasu is originally from MC, it has been more than 9 years since he transferred fromMC to the Company, and he is not in a position to receive instructions from the Offeror Related Parties, nor is he involvedin any way in the Transactions from the Offeror Related Parties’ side, nor is he in a position to be so involved. Therefore,

63the Company has found no conflict of interest with respect to the Company’s decision-making in the Transactions, and hehas participated in the deliberations and resolution at the both meetings of the Company’s board of directors above.
(IX) Establishment of measures to ensure purchase opportunities from other purchasers
Since there is a substantial period from February 6, 2024, which is the announcement date of the Tender Offer, until thecommencement of the Tender Offer, the Offeror believes that an opportunity for the Company’s minority shareholders tomake an appropriate decision regarding the tender of the Tender Offer and an opportunity for persons other than the Offeror
to purchase the Company Shares are secured.

In addition, the Offeror Related Parties have agreed in the Master

Agreement that, until the completion of the Transactions, they will not, directly or indirectly, propose, solicit, provide
information about, or discuss competitive transactions with any third party, and will not engage in any agreements
regarding competitive transactions or any other acts inconsistent with or in conflict with the Transactions (including theexercise or non-exercise of voting rights at the Company's general shareholders meetings that are inconsistent with orconflict with the Transactions). However, the Offeror Related Parties have not entered into any agreement with theCompany that would restrict anyone other than the Offeror Related Parties (the "Counter Offeror") from contacting theCompany, such as any agreement including transaction protection provisions that would prohibit the Company fromcontacting the Counter Offeror. In this way, together with the period until the commencement of the Tender Offer
mentioned above, consideration has been given to secure the fairness of the Tender Offer by ensuring the opportunity fora counter-purchase.
(X) Establishment of measures to ensure opportunity for the Company’s shareholders to make an appropriate decisionon whether to tender their shares in the Tender Offer
As described in "(5) Policies on organizational restructuring, etc. after the Tender Offer (matters concerning “two-stepacquisition”))" above, the Offeror (A) plans to request the Company to hold the Extraordinary General Shareholders
Meeting, which includes the agenda item to partially amend the articles of incorporation to abolish the provisions of share
units subject to the Share Consolidation and the effectuation of the Share Consolidation, promptly after the completion of
the settlement of the Tender Offer, and will not adopt any method where appraisal rights or the right to demand
determination of price will not be ensured for shareholders of the Company and the owners of the American Depositary
Receipts, and (B) the Offeror has clarified that, in the event of the Share Consolidation, the cash to be delivered asconsideration to shareholders of the Company will be calculated to be equal to the price obtained by multiplying the Tender
Offer Price by the number of the Company Shares owned by each such shareholder. Thus, the Offeror ensures anopportunity for shareholders of the Company and the owners of the American Depositary Receipts to make appropriate
decisions on whether to tender their shares in the Tender Offer, thereby giving consideration not to create any coercion.
Since the Offeror Related Parties hold 52,260,100 shares of the Company Shares in total (Shareholding Ratio: 52.16%)
as of today, the Offeror believes that setting a minimum number of the “Majority of Minority” in the Tender Offer would
destabilize the successful completion of the Tender Offer, which in turn might not serve the interests of minority
shareholders who wish to tender in the Tender Offer, and it has not set a minimum number of the “Majority of Minority”
in the Tender Offer. However, since the Offeror Related Parties and the Company implemented the measures in (I)through (X) above, the Offeror believes that due consideration was given to the interests of the Company’s minority
shareholders.
4. Tendering shares by the Company’s shareholders in the Tender Offer and other material agreements relating to the Tender
Offer(1) Capital and Business Alliance Agreement

64

The Company executed the Capital and Business Alliance Agreement with the Offeror Related Parties as of February
6, 2024. A summary of the Capital and Business Alliance Agreement is as follows.
(i) Purpose
・Maximize the corporate value of the Lawson Group by strengthening each business of the Lawson Group toward therealization of a new-generation “hub of refreshment in every community” that creates new consumer value throughthe integration of “real, digital and green”, taking advantage of one of the main consumer contact points in Japan・Expand business infrastructure and create new values of the MC Group and the KDDI Group through the growth of
the Lawson Group(ii) Details of capital alliance・Establish capital relationship between the Offeror Related Parties and the Company through the Transactions (Theprovision becomes effective on the closing date (meaning the day on which the Share Consolidation becomes
effective and the ratio of voting rights held by MC and the Offeror in the Company becomes 50.00% each; hereinafter
the same.))(iii) Details of the business alliance・Substantially implement the business alliance in the following fields (the “Business Alliance”), contribute to andcooperate in the promotion of each of the following measures (The provision becomes effective on the closing date.),and establish a collaboration promotion committee as a forum for discussions of the policies and progress of theBusiness Alliance(A) Relation to real stores: Create a new type of store that can provide new services utilizing the functions andcommodities of each company at real stores, which are the strengths of both the Company and the Offeror(B) Relation to digital collaboration: Expand users of the Lawson Group’s services and make them loyal customers bylinking the membership information held by each group of the Offeror Related Parties and the Company and utilizing
their customer data bases.
(C) Relation to green collaboration: Promote decarbonization and a circular economy business of the Lawson Group by
utilizing the business infrastructure of the Offeror Related Parties and their groups.
(D) Business collaboration in other fields: Cooperate in the initiatives in other fields to maximize the Lawson Group’s
corporate value, as determined by the collaboration promotion committee after discussions between the Offeror
Related Parties and the Company.
・Discuss and consider such matters as the schemes of the Business Alliance and roles of each party based on theassumption that (A) the Offeror Related Parties and their groups provide their management resources to the Lawson
Group sufficiently within the scope of economic rationality, and (B) the Lawson Group provides its management
resources to the Offeror Related Parties and their groups sufficiently within the scope of economic rationality (Theprovision becomes effective on the closing date.)
・Agree at the collaboration promotion committee on the details of the schemes of the Business Alliance and specificroles of each party within 12 months from the date of execution of the Capital and Business Alliance Agreement,
based on the results of the above discussions and considerations (The provision becomes effective on the closing
date.)
・As a general rule, conduct the schemes agreed by the collaboration promotion committee (Such schemes and roles ofeach party are reviewed every three years starting from the time of the above agreement.) within three years from theclosing date (The provision becomes effective on the closing date.)(iv) Management, etc. of the Company
・The Offeror Related Parties confirm that the officers and employees of the Lawson Group will, through the Business
Alliance, strengthen the Company’s existing businesses and develop new businesses, maximize the Company’s

65corporate value, and operate the Company with the aim of “improving Life Time Value for consumers” and “affluent
Japanese communities”.
・The Offeror Related parties, to the maxmimum extent within the commercially reasonable scope, respect theCompany’s trade practice existing before the closing date regarding the Lawson Group’s contractual relationships andbusiness relationships existing before the closing date (including the terms of contracts with franchisee owners of thestores), to the extent conducive to enhance the Lawson Group’s corporate value (The provision becomes effective on
the closing date.)
・The Offeror Related Parties’ obligations to maintain the employment of the Lawson Group’s employees and to ensurethat the level of the employment conditions for such employees does not substantially fall below the level as of theexecution date of the Capital and Business Alliance Agreement, except in the case of their compulsory retirement or
disciplinary actions issued against them based on laws and regulations and internal rules, the required change to theemployment conditions for the employees of the Lawson Group due to the significant change of market conditions
or business environments, or otherwise following the traditionally established practical operations of the Lawson
Group (The provision becomes effective on the closing date.)
・Discuss in good faith the Company’s stock option system existing as of the execution date of the Capital and Business
Alliance Agreement
・The Company’s obligation to request, to the commercially reasonable extent, that each employee stock ownershipassociation take measures to tender all Company Shares held by each holding company of the Lawson Group in theTender Offer and measures necessary to comply with the laws and regulations applicable to the Tender Offer
・Dispatch or temporarily transfer the Offeror Related Parties and the officers and employees of their groups to theLawson Group as necessary in order to effectively and substantially promote the Business Alliance (The provision
becomes effective on the closing date.)(2) Master Agreement
It is understood that as described in “(II) Background, purposes and decision-making process leading to the Offeror
Related Parties’ decision to conduct the Tender Offer” in “(2) Grounds and reasons for the opinion on the Tender Offer”
in “3. Details of, and grounds and reasons for the opinion on the Tender Offer” above, the Offeror executed the Master
Agreement regarding the Transactions with MC as of February 6, 2024. A summary of the Master Agreement isunderstood to be as follows.
(i) Matters regarding the Transactions
The Offeror Related Parties will conduct the Transactions as follows:(A)The Offeror will conduct the Tender Offer for privatization of the Company.

MC will not tender theCompany Shares held by MC in the Tender Offer.
(B)If not all of the Company Share Certificates are acquired in the Tender Offer even if the Tender Offer was
successfully completed, the Squeeze-out Procedure will be conducted in order to make the Offeror Related Parties
the only Company shareholders and to privatize the Company.


The Offeror will conduct the Tender Offer subject to the satisfaction of all of the Conditions Precedent, in
accordance with applicable laws, regulations, etc. and the Master Agreement.



Until the Transactions have been completed, the Offeror Related Parties will not directly or indirectly make any
proposal, solicitation, provision of information, or consultation with any third party regarding transactions that
virtually compete with, conflict with, or infringe on the Transactions, such as implementation of the tender offer
subject to the Company Share Certificates, or make it difficult to implement the Transactions, or which have aconcrete possibility of doing so (the “Competing Transactions”); and they will not conduct any act that conflicts

66with or infringes on the Transactions such as an agreement related to the Competing Transactions (including theexercise or non-exercise of voting rights at the Company’s shareholders meeting that conflict with or infringe on
the Transactions); if they receive a proposal for Competing Transactions from any third party or come to knowthat there is such proposal, they will reasonably promptly notify the other party to that effect and of the details of
the relevant proposal, and consult on responses to the Competing Transactions in good faith.
In the Tender Offer, solicitation of the Company’s shareholders located in the United States will be conducted,
tenders for the Tender Offer from the United States will be accepted (however, the Offeror will not accept tenders
for American Depositary Receipts, and will accept only tenders for the Company Shares related to American
Depositary Shares represented by American Depositary Receipts), and the Offeror Related Parties will provide
mutual cooperation (including reasonably necessary cooperation by each party’s subsidiaries and affiliates) toprovide responses in compliance with the U.S. Securities Act.

(ii) Other mattersIn addition, under the Master Agreement, (A) MC shall be obliged to use its best effort to the extent reasonably
possible and commercially reasonable and necessary to ensure that the Company will perform its business
operations and manage and operate its assets substantially the same as before the execution date of the Master
Agreement and within the scope of ordinary business and the Company will not perform certain acts from theexecution date of the Master Agreement to the completion of settlement of the Tender Offer, except for the casenecessary for conducting the Transactions or agreed between the Parties in accordance with the Master Agreement,(B) the Offeror Related Parties shall be obliged to make the same efforts as above (A) from the completion of
settlement of the Tender Offer to the completion of the Transactions, (C) the Offeror Related Parties shall have an
obligation to consult in good faith the business operation of the Company Group from the completion of
settlement of the Tender Offer to the completion of the Transactions, (D) the Offeror Related Parties shall beobliged not to transfer their Company Shares from the execution date of the Master Agreement to the completionof the Transactions, unless otherwise following the Definitive Agreements or with the prior written consent ofanother party, (E) the Offeror Related Parties, as soon as practicable after the execution of the Master Agreement,
shall be obliged to legally complete the Competition Act Response Procedure, to which they have obligations inrelation to the implementation of the Transactions in accordance with laws and regulations, (F) MC and theOfferor shall respectively make representations and warranties (Notes 1 and 2), and (G) MC and the Offeror shallbe obliged to compensate for damages, etc., in the event of breach of the representations and warranties or the
obligations under the Master Agreement.
(Note 1) Regarding MC, MC generally represents and warrants under the Master Agreement as to (a) thevalidity of its survival and powers, (b) the validity of its power to enter into and perform theDefinitive Agreements and performance of necessary procedures, (c) the enforceability of theDefinitive Agreements, (d) no conflict of laws or regulations, (e) no legal insolvency procedures,and (f) the possession of the Company Shares. In addition, regarding the Company Group, MC
represents and warrants as to (a) the validity of the survival and powers of the Company, (b) the
total number of issued shares of the Company, the number of share options, etc., (c) no legal
insolvency procedures, (d) non-applicability of anti-social forces, and (e) accuracy of information
disclosed by the Company Group.
(Note 2) With respect to the Offeror, the Offeror generally represents and warrants under the Master Agreement
as to (a) the validity of its survival and powers, (b) the validity of its power to enter into and performthe Definitive Agreements and performance of necessary procedures, (c) the enforceability of the67

Definitive Agreements, (d) no conflict of laws or regulations, (e) no legal insolvency procedures,and (f) the possession of the Company Shares.
(3) Shareholders Agreement
It is understood that as described in “(I) Outline of the Tender Offer” in “(2) Grounds and reasons for the opinion on
the Tender Offer” in “3. Details of, and grounds and reasons for the opinion on the Tender Offer” above, the Offeror
executed the Shareholders Agreement with MC as of February 6, 2024, with respect to such matters as the joint operationof the Lawson Group. A summary of the Shareholders Agreement is as follows. Except for certain provisions suchas general provisions, the Shareholders Agreement will become effective when the Squeeze-out Procedure is completed
and the ratio of voting rights held by MC and the Offeror in the Company becomes 50.00% each.
(i) Matters concerning the organization and operation of the Company, etc.
Organizational planning of the Company (board of directors, board of company auditors, companies withfinancial auditors)



Changes in the articles of incorporation, regulations of the board of directors, and regulations of the management
meeting

The right to appoint the Company’s directors (the number of directors shall be six; MC and the Offeror will
appoint three each)The right to appoint the Company’s representative directors (the number of representative directors shall be two;
MC will appoint one representative director and president and the Offeror will appoint one representative director
and vice president; to be agreed through faithful consultations as to which party will appoint the representative
director and president and the representative director and vice president for fiscal years following the fiscal year
in which the five-year periods after the date of completion of the Transactions has elapsed)Establishment of the management meeting of the Company



Establishment of the steering committee between the Offeror Related Parties for five years after the completionof the Transactions



The right to appoint auditors of the Company (the number of auditors shall be four, of which one each shall be
appointed by MC and the Offeror, and the remaining auditors shall be agreed upon after faithful consultations)

Sincere consultation about the business plan and the annual budget proposal of the Company

Matters related to the distribution policy of the Company

Procedures in the case of deadlock(ii) Matters concerning transfer of shares, etc.


Restrictions on transfer of the Company SharesPreferred negotiating rights and the tag along right of the Offeror Related Parties after five years from the date ofcompletion of the Transactions

Call options and put options, etc. in the breach of the Shareholders Agreement(iii) Other mattersIn addition, under the Shareholders Agreement, the Offeror Related Parties agree on (A) representations andwarranties, (B) in the case where the nominated director concurrently holds the post of officer or employee of acompany, etc. carrying out a business that may compete with the business of the Company, the obligation to havethe director obtain approval after submitting a report to the Company’s board of directors, (C) the prohibition ofheadhunting of the Company Group employees, etc., and (D) the obligation to provide information on the
Company Group, etc.

68

5. Details of provisions of benefits by the Offeror or its special related parties
Not applicable.
6. Response policy relating to fundamental policy regarding the control of the Company
Not applicable.
7. Questions to the Offeror
Not applicable.
8. Request for postponement of the Tender Offer Period
Not applicable.
9. Future prospects
Please refer to “(II) Background, purposes and decision-making process leading to the Offeror Related Parties’ decision
to conduct the Tender Offer” in “(2) Grounds and reasons for the opinion on the Tender Offer,” “(4) Possibility of delisting
and reasons therefor” and “(5) Policies on organizational restructuring, etc. after the Tender Offer (matters concerning“two-step acquisition”),” in “3. Details of, and grounds and reasons for the opinion on the Tender Offer” above.
10. Transactions with controlling shareholders(1) Applicability of transactions with controlling shareholders and status of compliance with the Policy Concerning Measures
to Protect Minority Shareholders
Since the Master Agreement and the Shareholders Agreement have been executed between MC, the controllingshareholder (parent company) of the Company, and the Offeror, the Tender Offer will be conducted and the Capital andBusiness Alliance Agreement is executed with MC, the controlling shareholder (parent company) of the Company, as apart of the Transactions, the Company deems that the expression of opinions on the Tender Offer at the meeting of theCompany’s the board of directors is equivalent to the transactions with controlling shareholders as defined in the
Securities Listing Regulations of the TSE.
In the “Policy Concerning Measures to Protect Minority Shareholders upon Conducting Transactions with Controlling
Shareholder” section of the Corporate Governance Report disclosed on May 25, 2023, the Company stated that “As alisted company, we ensure certain independence.

Even in transactions with parent company, MC, and its groupcompanies, we have determined their terms and conditions like other general transactions after considering prices ofother companies and actual prices of the market to prevent minority shareholders from being disadvantageous.” and that“the Company has voluntarily established a special committee to deliberate and consider significant transactions and any
conduct involving a conflict of interest between MC, the parent company, and minority shareholders. The committee
comprises of 5 members including the committee chairperson, all of whom are outside directors and outside corporate
auditors independent of the parent company, ensuring a highly independent structure to ascertain the necessity, rationality,
appropriateness, and fairness of the significant transactions and conduct in question and report the results to the Board of
Directors.” (The special committee stated above is a permanent committee, which is a different meeting body from theSpecial Committee.)
As described in “(6) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of
the Tender Offer Price and measures to avoid conflicts of interest” in “3. Details of, and grounds and reasons for theopinion on the Tender Offer” above, the Company has taken measures to ensure the fairness and measures to avoid
conflicts of interests of the Tender Offer. Also, since the regular “special committee” stated above reported that it

69

approved the Transactions as of February 6, 2024 and today, the Company believes that these measures conform to theabove policy.
(2) Measures to ensure fairness and measures to avoid conflicts of interest
Please refer to “(6) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of theTender Offer Price and measures to avoid conflicts of interest” in “3. Details of, and grounds and reasons for the opinion
on the Tender Offer” above.
(3) Summary of opinions procured from a person who has no interest in the controlling shareholders regarding the fact thattransactions do not give disadvantages to minority shareholders
As described in “(II) Establishment of independent special committee at the Company and procurement of a reportfrom the special committee” in “(6) Measures to ensure the fairness of the Tender Offer, such as measures to ensure thefairness of the Tender Offer Price and measures to avoid conflicts of interest” in “3. Details of, and grounds and reasonsfor the opinion on the Tender Offer” above, the Company procured the report to the effect that the decision to carry out
the Transactions does not give disadvantages to the Company’s minority shareholders as of February 5, 2024, from theSpecial Committee, which is independent of both the Offeror Related Parties and the Company. Also, the Company
confirmed the facts regarding whether or not there have been material changes of situation that may affect theTransactions since February 5, 2023, and procured the report from the Special Committee indicating that there is nochange to the Special Committee’s opinion that the decision to implement the Transactions is not disadvantageos to theCompany’s minority shareholders as of March 26, 2024.
11. Others
At the board of directors’ meeting of the Company held on February 6, 2024, the Company revised the dividend
forecast for the fiscal year ending February 2024 and resolved that it would not pay dividends for the fiscal year ending
February 2024. For details, please refer to “Notice of Revision of Year-End Dividend Forecast for the Fiscal YearEnding February 2024 (No Dividend)” announced as of February 6, 2024 by the Company.

End(Reference)“Notice Regarding Commencement of Tender Offer for Shares of Lawson, Inc. (Securities Code: 2651)” dated March 27,2024 (attached)[Regulation on solicitation]
This press release is a statement expressing the Company’s opinion regarding the Tender Offer and has not been prepared for the purpose of soliciting an offer
to sell securities or to make an offer to purchase securities pertaining to the Tender Offer. If shareholders and the Share Option Holders wish to make an offer
to sell their securities, they should first read the Tender Offer Explanatory Statement concerning the Tender Offer and make an offer to sell their securities attheir own discretion. This press release shall neither be, nor constitute a part of, an offer to sell or purchase, or a solicitation of an offer to sell or purchase,
any securities, and neither this press release (or part of this press release) nor its distribution shall be interpreted to constitute the basis of any agreement inrelation to the Tender Offer, and neither this press release (or any part of this press release) nor its distribution may be relied upon at the time of entering into
any such agreement.
[Forward-Looking Statements]
This press release and the documents referenced in this press release may contain expressions concerning future prospects, including “expect,” “forecast,”“anticipate,” “intend,” “plan,” “be convinced,” “project,” and “estimate.” These expressions are based on the current business prospects of the Offeror Related
Parties or the Company, as applicable, and they are subject to change depending on future circumstances and developments,. None of the Offeror Related
Parties, nor any of their respective affiliates assumes any obligation to update these expressions concerning future prospects to reflect actual performance and70other circumstances and developments, and changes to the conditions or other related factors.
[U.S. regulations]
The Tender Offer is for shares of the Company, a company incorporated in Japan. The Tender Offer shall be implemented in compliance with the procedures
and information disclosure standards prescribed by Japanese law, and these procedures and standards are not necessarily the same as the procedures andinformation disclosure standards in the United States. In particular, Section 13(e) or 14(d) of the U.S. Securities Exchange Act of 1934, as amended (the“Securities Exchange Act”) and the rules and regulations thereunder do not apply to the Tender Offer, and the Tender Offer is not necessarily conductedconsistent with these procedures and standards. The financial information contained in this press release and the documents referenced in this press releaseis based on international accounting standards, which may differ materially from generally accepted accounting principles in the United States and othercountries. Since the Offeror Related Parties and the Company are corporations incorporated outside the United States and all or some of their directors andofficers are not residents of the United States, it may be difficult to exercise, make or enforce any right or claim arising under the U.S. federal securities laws.
It may not be possible to commence legal proceedings against a non-U.S. corporation and its directors and officers in a non-U.S. court for violations of U.S.
securities laws. In addition, U.S. courts are not necessarily granted jurisdiction over non-U.S. corporations and their subsidiaries and affiliates and 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 to the jurisdictionof a U.S. court.
Unless otherwise stated, all procedures relating to the Tender Offer shall be conducted in Japanese. Although all or part of the documents relating to theTender Offer may be prepared in English, if there is any discrepancy between the Japanese documents and the corresponding English documents, the Japanese
documents shall prevail.
Statements in this press release and the documents referenced in this press release contain “forward-looking statements” within the meaning of Section 27A of
the U.S. Securities Act of 1933,as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act. Known and unknown risks, uncertainties,
and other factors could cause actual results to differ materially from the results implied or expressly stated as “forward-looking statements”. None of theOfferor Related Parties, the Company nor their respective affiliates give any assurance or guarantee that the results implied or expressly stated by these forwardlooking statements will be achieved. The “forward-looking statements” contained in this press release and the documents referenced in this press release
have been prepared based upon the information available to the Offeror Related Parties and the Company or their respective affiliates, as of the date of thispress release, and unless otherwise required by applicable laws and regulations, none of the Offeror Related Parties, the Company, nor any of their respective
affiliates is under any obligation to change or revise the “forward-looking statements” to reflect future events and circumstances.
The Offeror Related Parties, the Company, each of the financial advisors to the Offeror Related Parties and the Company, and the tender offer agent (including
the related companies thereof) may, to the extent of their regular business, purchase or take actions to purchase the Company Shares outside the Tender Offerprior to the commencement of, or during the period of, the Tender Offer, to the extent permitted under the Financial Instruments and Exchange Related Laws
and Regulations of Japan and other applicable laws and regulations and subject to the requirements of Rule 14e-5(b) under the Securities Exchange Act. Such
purchase may be conducted at a market price through a market transaction or a price determined in off-market negotiations. If the relevant information
concerning such purchases is disclosed in Japan, it shall also be disclosed in the United States by an equivalent method of disclosure.
[Other countries]
The announcement, issuance, or distribution of this press release may be legally restricted in some countries or territories. In such cases, shareholders should
be aware of and comply with such restrictions. The announcement, issue or distribution of this press release shall not be interpreted as an offer to purchaseor solicitation of an offer to sell share certificates concerning the Tender Offer, but simply as a distribution of information.

71

[Translation]
March 27, 2024
To whom it may concern:
Company Name:
Name of Representative:

Contact:

KDDI Corporation
Makoto Takahashi
President, Representative Director, CEO(Securities Code: 9433 TSE Prime Market)
Yasuo Nakazato, General Manager ofGeneral Administration Division,
Corporate Sector(TEL．03-3347-0077)

Notice Regarding Commencement of Tender Offer for Shares of Lawson, Inc. (Securities Code: 2651)
As announced in the “Notice Regarding Planned Commencement of Tender Offer for Shares of Lawson, Inc.
(Securities Code: 2651) and the Execution of the Capital and Business Alliance Agreement” dated February 6,2024 (as amended; the “Offeror Press Release Dated February 6, 2024”), KDDI Corporation (the “Offeror”) has
resolved to enter into with Mitsubishi Corporation (“MC”; the Offeror and MC collectively referred to as the“Offeror Related Parties”), the parent company of Lawson, Inc. (Securities Code: 2651, a company listed on thePrime Market of Tokyo Stock Exchange, Inc. (the “TSE”); the “Target”), on February 6, 2024, a masteragreement stipulating that the Offeror will acquire the share certificates, etc. of the Target through a tender offer
under the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended; the “Act”) (the “Tender
Offer”) (the “Master Agreement”), and to enter into a capital and business alliance agreement with MC and theTarget (the “Capital and Business Alliance Agreement”).
The Tender Offer was scheduled to be commenced promptly upon the satisfaction (or waiver by the Offeror
Related Parties) of the Conditions Precedent (as defined in “(1) Outline of the Tender Offer” under “1. Purposesof Tender Offer” below), and as set forth in “(1) Outline of the Tender Offer” under “1. Purposes of Tender Offer”
below, as we have confirmed that all of the Conditions Precedent have been satisfied as of today, we decided
today that the Tender Offer will be commenced on March 28, 2024, and we hereby announce as follows.
1. Purposes of Tender Offer(1) Outline of the Tender Offer
As of today, of the shares of common stock of the Target listed on the TSE Prime Market (the “Target
Shares”), the Offeror owns 2,110,000 shares (Shareholding Ratio (Note 1): 2.11%).

72

(Note 1) “Shareholding Ratio” refers to the ratio (rounded to the second decimal place; hereinafter the same
applies in the calculation of the Shareholding Ratio) of the number of Target Shares to the number ofshares (100,183,915 shares) (the “Total Number of Shares After Adjustment for Diluted Shares”)
calculated by deducting the number of treasury shares held by the Target on February 29, 2024, as
informed by the Target (222,085 shares) from the number of shares calculated by adding the total
number of the Target Shares to be issued upon exercise of 1,060 units (Note 2) of Share Options (asdefined in “(II) Share options” under “(3) Price of tender offer” under “2. Summary of Tender Offer”
below; hereinafter the same) (106,000 shares) reported by the Target as remaining as of February 29,
2024 to the total number of issued shares as of January 12, 2024, as stated in the “third Quarterly
Report for the 49th fiscal year” submitted by the Target on January 12, 2024 (the “Target Third
Quarterly Report”) (100,300,000 shares).
(Note 2) The breakdown of 1,060 units of the Share Options is as follows (The names of the respective shareoptions are defined in “(II) Share options” under “(3) Price of tender offer” under “2. Summary of
Tender Offer” below; hereinafter the same):
Number of the Target Shares to
Number of Share Options as ofName of Share Options
be issued upon exercise of the
February 29, 2024 (units)
Share Options (shares)
14th Series of Share Options
27
2,700
16th Series of Share Options
38
3,800
17th Series of Share Options
62
6,200
18th Series of Share Options
18
1,800
19th Series of Share Options
74
7,400
20th Series of Share Options92
9,200
21st Series of Share Options
135
13,50022nd Series of Share Options
162
16,20023rd Series of Share Options
186
18,60024th Series of Share Options
266
26,600As announced in the Offeror Press Release Dated February 6, 2024, on February 6, 2024, the Offeror enteredinto the Master Agreement and the shareholders agreement (the “Shareholders Agreement”; the Master
Agreement, the Shareholders Agreement, and the Capital and Business Alliance Agreement hereinaftercollectively referred to as the “Definitive Agreements”) (For details of the Master Agreement, the Shareholders
Agreement, and the Capital and Business Alliance Agreement, please refer to “(I) Master Agreement”, “(II)Shareholders Agreement”, and “(III) Capital and Business Alliance Agreement” under “(6) Material
agreements relating to the Tender Offer” below) with MC, the parent company of the Target (number of shares
held: 50,150,100 shares, Shareholding Ratio: 50.06%), and decided to execute a series of transactions (together
with execution of the Capital and Business Alliance Agreement, the “Transactions”) in order to ensure that theTarget’s shareholders are solely the Offeror Related Parties, by acquiring all of the Target Shares (including theTarget Shares related to such American Depositary Shares (as defined in “(III) Depositary receipts for sharecertificates” under “(3) Price of tender offer” under “2. Summary of Tender Offer” below; hereinafter the same)
represented by the American Depositary Receipts (as defined in “(III) Depositary receipts for share certificates”
under “(3) Price of tender offer” under “2. Summary of Tender Offer” below; hereinafter the same); however,73excluding Target Shares owned by the Offeror Related Parties and the treasury shares owned by the Target)
and Share Options (the Target Shares and the Share Options collectively referred to as the “Target’s Share
Certificates”), and has planned to conduct the Tender Offer as part of the Transactions, provided that theconditions precedent, including the completion of the procedures and actions required under the competition
laws (the “Competition Law Procedures”) of Japan, China, South Korea, and the EU and other conditions
precedent stipulated in the Master Agreement (Note 3) (the “Conditions Precedent”) are satisfied (or waived
by the Offeror Related Parties).
(Note 3) Under the Master Agreement, the commencement of the Tender Offer by the Offeror is subject to thesatisfaction of (I) the representations and warranties made by the Offeror Related Parties (for detailsof such representations and warranties, please refer to “(I) Master Agreement” under “(6) Material
agreements relating to the Tender Offer” below) are all true and accurate in all material respects;(II) all of the Definitive Agreements have been validly and lawfully executed and remain valid, andall obligations to be fulfilled or complied with by each party under the Definitive Agreements prior
to the commencement of the Tender Offer have been fulfilled or complied with in all material
respects; (III) the Target’s board of directors has approved the Tender Offer and to the Target’s
shareholders to recommend that they tender their shares in the Tender Offer (the “Opinion in Favor
of Tender Offer”; hereinafter the same) with the unanimous consent of all disinterested directors, andthe Opinion in Favor of Tender Offer is made public and is maintained; (IV) the Special Committee(as defined in “(i) Background of the proposal by the Offeror Related Parties and establishment of areview system” under “(II) Decision-making process leading to and grounds for the opinion in favorof the Tender Offer by the Target” under “(2) Background, purpose and decision-making process
leading to the decision to conduct the Tender Offer, and management policy following the Tender
Offer” below; hereinafter the same), which was established in connection with the Tender Offer, hasmade a report to the Target’s board of directors that it is appropriate to express the Opinion in Favor
of Tender Offer and such report has been made public, and the report is maintained; (V) all
Competition Law Procedures and other procedures with relevant authorities necessary for the
implementation of the Transactions have been completed; (VI) the implementation of any of theTransactions do not constitute a violation of laws and regulations, and there is no determination, etc.
by any relevant authority that restricts or prohibits the implementation of any of the Transactions; and(VII) as of the commencement date of the Tender Offer, there are no material facts regarding theTarget’s business, etc. (Article 166, paragraph 2 of the Act) that have not been disclosed (Article 166,
paragraph 4 of the Act) and there are no facts in connection with the implementation of a tender offer,etc. (Article 167, paragraph 2 of the Act) with respect to the Target’s Share Certificates that have notbeen disclosed (Article 167, paragraph 4 of the Act); (VIII) from February 6, 2024 onward, any eventthat may have a material adverse effect on the business, financial condition, operating results, or cash
flows, or the prospects thereof of the Target Group (as defined in “(I) Background, purposes anddecision-making process leading to the decision to conduct the Tender Offer” under “(2) Background,purpose and decision-making process leading to the decision to conduct the Tender Offer, andmanagement policy following the Tender Offer” below; hereinafter the same), or any other situationthat may make it difficult to achieve the purpose of the Transactions has not occurred or become
apparent or is not reasonably expected to occur or become apparent, and no significant changes indomestic and international stock market conditions, other market environments, financial

74

environments, or economic environments have occurred or become apparent or are not reasonably
expected to occur or become apparent.
Thereafter, the Offeror confirmed that the Competition Law Procedures have been completed. Furthermore,as the Offeror has confirmed that all other Conditions Precedent have been satisfied as of today, the Offeror
decided today that the Tender Offer will be commenced on March 28, 2024.
The Offeror has set the minimum number of tendered shares to be purchased in the Tender Offer at 14,458,500
shares (Shareholding Ratio: 14.43%); and if the total number of the Target’s Share Certificates tendered in theTender Offer (the “Tendered Shares”) is less than the minimum number of tendered shares to be purchased, theOfferor will purchase none of the Tendered Shares. Meanwhile, with the Offeror’s intention of having theTarget Shares go private, the Offeror has not set the maximum number of tendered shares to be purchased in theTender Offer; and if the total number of the Tendered Shares is not less than the minimum number of tenderedshares to be purchased, the Offeror will purchase all of the Tendered Shares. The minimum number oftendered shares to be purchased (14,458,500 shares) has been set so that upon the completion of the Tender
Offer, the total number of voting rights of the Target held by the Offeror Related Parties should be two-thirds(2/3) or more of the total number of voting rights of the Target (the number of voting rights of the Target,
1,000,779, in respect of the number of shares (100,077,915 shares) which is the number of shares calculated bydeducting the number of treasury shares held by the Target on February 29, 2024, as informed by the Target(222,085 shares) from the total number of issued shares (100,300,000 shares) as of January 12, 2024 as statedin the Target Third Quarterly Report).
With respect to the number of Target Shares (106,000 shares) to be issued upon exercise of the Share Options,
given that (i) the holder of the Share Options (the “Share Option Holders”) may exercise such holder’s Share
Options only in a lump sum, within the exercise period of the Share Options which is limited to the 10-day period(or the following business day if the 10th day falls on a holiday) from the date following the date on which such
Share Option Holder has lost his/her/their position as the Target’s director and executive officer (the exercise
conditions associated with the loss of status hereinafter collectively referred to as the “Forfeiture of Status
Exercise Conditions”), and according to the Target, among the Target’s current 5 directors and the current 13
executive officers who are the Share Option Holders, there is no person who plans to exercise the Share Options
by fulfilling the Forfeiture of Status Exercise Conditions and it is not assumed that the Share Options will be
exercised and Target Shares will be issued or transferred to the Share Option Holders during the period for atender offer in the Tender Offer (the “Tender Offer Period”); and (ii) as stated in “(4) Policies on organizational
restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)” below, when the Tender
Offer is completed, the Offeror Related Parties plan to request the Target to carry out the procedures reasonably
necessary for the execution of the Transactions, such as encouraging the Share Option Holders to forfeit their
Share Options and according to the Target, if the Target receives such a request, it intends to cooperate with itpromptly after the settlement commencement date of the Tender Offer, the Offeror does not take into account the
number of Target Shares (106,000 shares) to be issued upon exercise of the Share Options when setting theminimum number of tendered shares to be purchased.
In addition, as the Offeror aims to make the Offeror Related Parties the sole shareholders of the Target as set
forth above, if, upon the completion of the Tender Offer, in the event the Offeror Related Parties fails to acquire
all of the Target’s Share Certificates in the Tender Offer, the Offeror Related Parties plans, as described in “(4)75Policies on organizational restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)”
below, to implement a series of procedures to make the Offeror Related Parties the Target’s only shareholders(the “Squeeze-out Procedure”). The Offeror plans to finance the Transactions, including the Tender Offer,through borrowings from MUFG Bank, Ltd. (“MUFG”) (the “Bank Loan”), and subject to the completion of theTender Offer, the Offeror plans to receive the Bank Loan by the business day prior to the commencement date ofsettlement of the Tender Offer.
We plan to conduct each of the transactions as substantially described below as the Transactions.
I. Prior to the implementation of the Tender Offer (current status)
As of today, MC owns 50,150,100 Target Shares (Shareholding Ratio: 50.06%), the Offeror owns 2,110,000
Target Shares (Shareholding Ratio: 2.11%), and other minority shareholders own 47,817,815 Target Shares(Shareholding Ratio: 47.73%) and 1,060 Share Options (106,000 Target Shares to be issued upon exercise of
the Share Options (Shareholding Ratio: 0.11%)).

MC

Other shareholders and theOfferor50.06%

Share Option Holders
2.11%

47.84%

TargetII. Tender Offer
The Offeror will conduct the Tender Offer with the aim of acquiring all of the Target’s Share Certificateswith the purpose of having the Target Shares go private.

76

Tender Offer
MCOther shareholders and theOfferorShare Option Holders
50.06%

2.11%

47.84%

TargetIII. Squeeze-out Procedure through Share Consolidation (upon the completion of the Tender Offer)
In the event the Offeror fails to acquire all of the Target’s Share Certificates in the Tender Offer, the Offeror,
together with MC, shall request the Target to implement the procedures for the Share Consolidation (as definedin “(4) Policies on organizational restructuring, etc. after the Tender Offer (matters concerning “two-stepacquisition”)” below; hereinafter the same), subject to the completion of Tender Offer and the completion of
the settlement thereof, and the Target shall implement the procedures to make the Target’s shareholders solely
the Offeror Related Parties. With respect to the ratio of the Share Consolidation, the Offeror, together with
MC, plans to request the Target to set the ratio of the Share Consolidation to a ratio where the total number ofissued shares of the Target is two shares (however, if, as a result of discussions between the Offeror Related
Parties, the Offeror Related Parties agree to a different ratio, such different ratio) (the “Consolidation Ratio”)(if a different ratio is set, such ratio will be promptly disclosed). In addition, if any fractional shares (including
fractional shares of the Target Shares owned by MC) result from the implementation of the Share
Consolidation, the Offeror plans to purchase the Target Shares equivalent to the total number of such fractional
shares (any fractional shares less than one share resulting from the aggregation of fractional shares shall bediscarded; hereinafter the same) in accordance with the procedures provided in Article 235 of the Companies
Act (Act No. 86 of 2005, as amended; the “Companies Act”) and other relevant laws and regulations.

77

Squeeze-out through the Share
Consolidation
MC

Other shareholders and theOfferor50.06%

Share Option Holders

100-(α+50.06)%

α%

TargetIV. After the implementation of the Transactions
After completion of the Squeeze-out Procedure, MC and the Offeror each plan to hold 50.00% of thevoting rights in the Target.

MC

Offeror50.00%

50.00%

TargetAs of today, the Target Shares are listed on the TSE Prime Market. However, as described in “(5)Possibility of delisting and reason therefor” below, depending on the outcome of the Tender Offer, the Target
Shares may become delisted through the prescribed procedures. If the Squeeze-out Procedure is to be
implemented after the Tender Offer is completed, the Target Shares will be delisted through the prescribed
procedures.
According to “Notice of Expression of Our Opinion in Favor of the Planned Commencement of andRecommendation to Tender in the Tender Offer for Company’s Share Certificates by KDDI Corporation and
Notice of Capital and Business Alliance” published on February 6, 2024 by the Target (as amended; the “Target

78

Press Release Dated February 6, 2024”), the Target resolved at its board of directors meeting held on
February 6, 2024, as the Target’s opinion as of February 6, 2024, to the effect that, if the Tender Offer iscommenced, it shall express its opinion in favor of the Tender Offer as the Target’s opinion as of February 6,2024 and recommend that the Target’s shareholders tender their shares in the Tender Offer, that it recommends
that the holders of the American Depositary Receipts tender in the Tender Offer by delivering their American
Depositary Receipts to the Depositary Bank (as defined in “(III) Depositary receipts for share certificates”
under “(3) Price of tender offer” under “2. Summary of Tender Offer” below; hereinafter the same) in advanceand receiving delivery of the Target Shares related to such American Depositary Shares represented on theAmerican Depositary Receipts; and that it leaves the decision to the Share Option Holders whether or not totender in the Tender Offer.
According to the Target, it has resolved at the above-mentioned board of directors meeting to take thefollowing procedures for the expression of its opinion. Specifically, the Target has also resolved to request,at the commencement of the Tender Offer, that the Special Committee established by the Target regarding theTender Offer review whether any change should be made to the opinion expressed by the Special Committee
to the Target’s board of directors as of February 5, 2024, and either advise the Target’s board of directors
accordingly if there is no change, or if any change should be made, state the amended opinion, and to again
express the Target’s opinion regarding the Tender Offer upon the commencement of the Tender Offer based onsuch opinion of the Special Committee, as described in “(ii) Establishment of an independent special committee
at the Target and receipt of a report from the special committee” under “(Measures to ensure the fairness of theTender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflictsof interest)” under “(II) Background of calculation” under “(4) Basis for calculation of the price of tender offer”
under “2. Summary of Tender Offer” below.
Furthermore, according to the “Notice of Expression of Our Opinion in Favor of the Commencement of andRecommendation to Tender in the Tender Offer for Company’s Share Certificates by KDDI Corporation”
announced by the Target today (the “Target Press Release Dated March 27, 2024;” together with the Target
Press Release Dated February 6, 2024, collectively referred to as the “Target’s Press Releases”), subsequently,
on February 21, 2024, the Target received notification from the Offeror that the Offeror expects that theCompetition Law Procedures will be completed by late March 2024, and based on that expectation, the Tender
Offer is expected to be commenced on March 28, 2024. In addition, on March 22, 2024, the Target received
a notification from the Offeror that the Tender Offer is scheduled to commence on March 28, 2024 on theassumption that the Conditions Precedent had been satisfied since the Competition Law Procedures have been
completed.
In response, according to the Target, the Target asked the Special Committee on March 25, 2024 to consider
whether there were any changes in the opinions expressed to the Target’s board of directors on February 5,2024 and requested that the Special Committee advise the Target’s board of directors accordingly if there were
no changes, or if any changes should be made, to state the amended opinion. On March 26, 2024, the Special
Committee submitted a written report stating that it is considered that there was no need to change the contentsof the report that the Special Committee made to the Target’s board of directors on February 5, 2024 (the“Written Report Dated March 26, 2024”; for the summary of the Written Report Dated March 26, 2024 andthe specific activities of the Special Committee, etc., please refer to “(ii) Establishment of independent special
committee at the Target and receipt of a written report from the special committee” under “(Measures to ensure
the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures79

to avoid conflicts of interest)” under “(II) Background of calculation” under “(4) Basis for calculation of theprice of tender offer” under “2. Summary of Tender Offer” below). Therefore, the Target once again carefully
discussed and considered the terms and conditions regarding the Tender Offer, taking into account the detailsof the written report and changes in the Target’s business performance and market environment after the boardof directors meeting held on February 6, 2024.
As a result, according to the Target, the Target believes that, even as of today, the implementation of theTransactions would contribute to enhancing the corporate value of the Target, that the purpose of theTransactions and the significance and necessity of achieving that purpose will only increase and will notdiminish, and that there were no factors that would change the Target’s judgment regarding the Tender Offer
as of February 6, 2024. Accordingly, at the board of directors meeting held today, the Target once again
resolved to the effect that it shall express its opinion in favor of the Tender Offer and recommend that theTarget’s shareholders tender their shares in the Tender Offer, that it recommends that holders of American
Depositary Receipts tender in the Tender Offer by delivering their American Depositary Receipts to the
Depositary Bank in advance and receiving delivery of the Target Shares related to such American Depositary
Shares represented by the American Depositary Receipts, and that it leaves to the Share Option Holders thedecision as to whether to tender in the Tender Offer. Further, according to the Target, the Target reported to
the Offeror today that as of today, there are no material facts regarding the Target’s business, etc. that have notbeen disclosed, or facts in connection with the implementation of a tender offer, etc. with respect to the Target’s
Share Certificates that have not been disclosed.
The Target states that the board resolutions of the Target of February 6, 2024 and today were passed on theassumption that, through the Tender Offer and the Squeeze-out Procedure by the Offeror, the Offeror Related
Parties will be the sole shareholders of the Target, and that the Target Shares are scheduled to be delisted.
For details regarding the decision-making process of the Target’s board of directors, please refer to theTarget’s Press Releases and “(II) Decision-making process leading to and grounds for the opinion in favor of
the Tender Offer by the Target” under “(2) Background, purpose and decision-making process leading to thedecision to conduct the Tender Offer, and management policy following the Tender Offer” below.
(2) Background, purpose and decision-making process leading to the decision to conduct the Tender Offer, andmanagement policy following the Tender Offer
The background, purpose and decision-making process leading to the decision to conduct the Tender Offer
by the Offeror Related Parties and the Target, and management policy following the Tender Offer are as
follows. The below descriptions of the Target are based on the information made publicly-available by theTarget, the Target’s Press Releases, and the explanations from the Target. Furthermore, the below descriptionsof MC are based on the information made publicly-available by MC, the “Notification Regarding Changing
Status of MC Subsidiary (Lawson, Inc.) into that of Equity-method Affiliate Company” announced on
February 6, 2024 by MC, and the explanations received from MC.
(I) Background, purposes and decision-making process leading to the decision to conduct the Tender Offer
The Offeror was established in 2000 as DDI Corporation as a result of the merger of three companies(Kokusai Denshin Denwa Co., Ltd. (KDD), which was established in 1953, DDI Corporation (DDI), which
was established in 1984 and changed its trade name in 1985, and IDO Corporation (IDO), which wasestablished in 1987,) with DDI as the surviving corporation, with the purpose of further enriching customers’
lives, business, and communications through “communication”. Subsequently, through the absorption-type80

mergers, etc., of mobile communication service companies consisting of seven cellular group companies andthree TU-KA group companies, and POWEREDCOM, Inc., which is an electric power communication
service provider, the Offeror has provided various services to its customers as a comprehensive
communication service provider that can provide mobile and Fixed Broadband (FTTH/CATV) Service (Note1) by a single company. DDI listed its shares on the TSE in 1993 and changed its trade name to KDDI
Corporation in 2001.
(Note 1) “Fixed Broadband (FTTH/CATV) Service” means communication services that can send andreceive large-capacity data at a high speed. Those using optical fibers are referred to as “FTTH”
and those using cable TV lines are referred to as “CATV.”
Currently, the Offeror Group (which refers to a corporate group consisting of the Offeror, its 189
consolidated subsidiaries, and its 43 affiliated companies subject to equity method (as of September 30,2023)) is expanding its business into various fields, with the provision of communication services toindividuals and corporate customers in Japan and overseas as its core business. In May 2022, the Offeror
Group announced “KDDI VISION 2030: The creation of a society in which anyone can make their dreams
a reality, by enhancing the power to connect,” and determined that it would aim to become a presence that
can add value to every industry and life scene, and become a “Platformer Supporting Society”. In addition,
the New Medium-Term Business Strategy (from the fiscal year ending March 2023 through the fiscal year
ending March 2025) is built upon “Sustainability Management” that aims to achieve the sustainable growthof society and the enhancement of corporate value together with its partners, and the Offeror Group aims foran era in which new value is created, by evolving the “power to connect” through the use of 5G’s
characteristics and blending telecommunications into every kind of scene. In particular, the Offeror Group
has set out a “Satellite Growth Strategy” as its business strategy and defined DX, finance, energy, LX, andregional co-creation as its five focused areas, and is accelerating the expansion of new business domains by
evolving the Offeror Group’s 5G telecommunications business and its businesses in focus areas centered on
telecommunications.
On the other hand, according to the Target, the Target was incorporated in April 1975 as Daiei Lawson
Co., Ltd. and changed its trade name to Lawson, Inc. in June 1996. Subsequently, according to the Target,
the Target listed its shares on the First Section of the TSE Market in July 2000; and in April 2022, the Target
moved to the Prime Market of the TSE Market in accordance with the review of the market classification of
the TSE. According to the Target, currently, the Target Group (referring to a corporate group consisting of
the Target, 30 consolidated subsidiaries, and 9 equity method affiliates (as of November 30, 2023)) operates
a franchising system for the convenience stores “LAWSON” and directly managed stores as its main
business.
According to the Target, since entering into a business alliance agreement (as amended; hereinafter thesame applies) with MC in February 2000, the Target has pursued mutual business synergies with MC andestablished its position as one of Japan’s leading convenience store chains. In addition, according to theTarget, the Target has aimed to realize the group philosophy of “Creating Happiness and Harmony in Our
Communities” in the medium-term management vision “Challenge 2025” formulated in FY 2021 inpreparation for 2025, the 50th anniversary of the Target’s incorporation, focusing its efforts on creating “new81hubs of refreshment in every community” (Note 2), and carried out various initiatives centered on “Superior
taste”, “Human kindness”, and “Environmental (Machi) friendliness”.
(Note 2) “New hubs of refreshment in every community” refers to stores in which everyone can find
“Whew!” Surprises and that bring peace of mind, excitement, and convenience to everyone’s
daily life, which is the ideal store image targeted by the Target.
According to the Target, the details of the main business and the mid to long term management strategies
for each business of the Target Group are as below.
(A) Domestic convenience store businessAccording to the Target, in the domestic convenience store business, the Target operates a franchisingsystem as the headquarters of franchise chains for “LAWSON,” “NATURAL LAWSON,” and “LAWSONSTORE 100” as well as directly managed stores. According to the Target, Lawson Urban Works, Inc., aconsolidated subsidiary of the Target, operates the convenience store “LAWSON” mainly in Tokyo andChiba prefecture; Lawson Store 100, Inc., a consolidated subsidiary of the Target, operates, and provides
management support for, the directly managed stores of “LAWSON STORE 100”; and SCI, Inc., aconsolidated subsidiary of the Target, is a functional subsidiary that comprehensively manages the businessprocess from procurement of raw materials to sales, improving the efficiency of, and optimizing the entire
process.
According to the Target, amid the outbreak of COVID-19, which has caused major changes in consumer
behavior, the Target has strengthened its lineup of daily-use products such as fresh and frozen foods in orderto respond to the customers’ stay-at-home demand, and in the current situation where more people are goingout as the flow of people recovers, the Target is responding to this change in consumer behavior more thanever, and is continuing to innovate products and create sales spaces that are easy to shop at. In addition,
based on the use of digital technologies, including the use of data within the Target Group, and the motivationand spirit of challenge of colleagues working together, the Target is pursuing “Three Promises” (Note 3) andis accelerating changes to create “new hubs of refreshment in every community,” which can provide newconvenience in the future. In order to accelerate these initiatives under the strategic concept of “community
based × individual customer and individual store-focused” (Note 4), the area company system (Note 5),
which was partially introduced in FY 2022, has been expanded nationwide since FY 2023.
According to the Target, the Target has positioned the domestic convenience store business as its corebusiness in its business portfolio strategy and plans to continue to strengthen this business throughconcentrated investment, and at the same time, intends to accelerate the evolution of its convenience store
business, including peripheral businesses, in order to implement “new convenience” and create a sustainablebusiness model. As its most recent major initiative, the Target has been working to realize the world’s fastest
quick commerce platform by linking delivery platform companies with its systems and increasing the numberof delivery products it handles.
(Note 3) “Three Promises” refers to “Superior taste,” “Human kindness,” and “Environmental (Machi)
friendliness” promised to customers and society by the Target.
(Note 4) “Community based × individual customer and individual store-focused” refers to aiming to
optimize product offerings that meet the needs of customers in each area.
(Note 5) “Area company system” refers to a structure for rigorously pursuing the creation of value forcustomers at locations closer to them, in which companies with great discretion are established82

in eight areas nationwide to realize “community based × individual customer and individual storefocused.”(B) Seijo Ishii businessAccording to the Target, Seijo Ishii Co., Ltd., a consolidated subsidiary of the Target, mainly operates 181
directly managed “Seijo Ishii” supermarkets (as of the end of November 2023) and a franchising system.
Seijo Ishii Co., Ltd. establishes its own unique business model of “vertical integration of food,” in which allof its processes, from importing, logistics, and manufacturing to wholesaling, retail sales, and restaurant
operations, are carried out in-house. Against the backdrop of its strong brand power, backed by high-quality
products and services, which are its strengths, Seijo Ishii Co., Ltd. has succeeded in capturing the stay-athome demand and is achieving rapid expansion in the scale of its business.
The new, integrated central kitchen, the “Yamato No. 3 central kitchen,” went into operation in July 2022,
significantly strengthening Seijo Ishii Co., Ltd.’s existing manufacturing capacity. Given that, Seijo Ishii Co.,
Ltd. now plans to open a new distribution center in order to promote the development of new categories of
products in the delicatessen division, further accelerate store openings in the Kanto region, and build a
distribution system in preparation for advancement and expansion into western Japan. Furthermore, in theEC business, the Seijo Ishii Net Supermarket has been jointly operating on Amazon.co.jp since March 2022,
and Seijo Ishii Co., Ltd. is working to strengthen its EC and to promote last-mile businesses.
(C) Entertainment-related businessAccording to the Target, Lawson Entertainment, Inc., a consolidated subsidiary of the Target, operates
ticketing businesses such as LAWSON Tickets and LAWSON Travel and a product sales business that sells
music/video software at HMV stores and via EC, etc. In addition, United Cinemas Co., Ltd., a consolidated
subsidiary of the Target, operates a cinema complex business that operates 41 movie theater complexes (asof the end of December 2023).
In its business portfolio strategy, the Target has positioned this business as one of the main sources of
earnings in 2025. In addition to vertically launching the travel business with a view to developing services
which seamlessly provide both entertainment and travel tickets and utilizing M&A transactions and alliances,
as well as strengthening product lineups and developing new products in the EC business, the Target isworking to develop its entertainment complex business by providing high added-value, such as premiumseats and other theatrical facilities, in the cinema business and expanding screening content other thanmovies. Through these initiatives, the Target is aiming to become the one and only comprehensive
entertainment distribution company.
(D) Financial services businessAccording to the Target, Lawson Bank, Inc., a consolidated subsidiary of the Target, has developed its
ATM business and retail businesses based on 13,509 ATMs installed at LAWSON stores nationwide (as ofthe end of March 2023); in addition, it provides services which connect ATM users with partner financial
institutions (385 companies as of the end of March 2023) and cashless operating companies through its ATM
network.
According to the Target, in its business portfolio strategy, the Target has positioned this business as one of
the main sources of earnings in 2025 and is working to increase the number of ATM users by expanding the83number of partner financial institutions and expanding Lawson Bank’s ATM services. In addition, theTarget aims to provide, as the “bank closest to customers,” new retail financial services to more than 3.6
billion store visitors annually.
(E) Overseas businessAccording to the Target, as an overseas business, the Target operates “LAWSON” stores in China,
Thailand, the Philippines, Indonesia, and Hawaii, U.S.A. with operating companies in the respective regions(Note 6).
(Note 6) According to the Target, in China, Thailand, the Philippines, and Hawaii, U.S.A., business
operations are primarily conducted through subsidiaries based on investments by the Target, andin Indonesia, the Target is conducting franchising operations through area-licensing to local
companies rather than conducting business operations through subsidiaries.
According to the Target, among the Target’s overseas businesses, in China, which boasts the largest scaleof business and is the main source of overseas sales revenue, in addition to store openings by the Target’s
Chinese subsidiaries, the Target is proceeding with opening stores through mega-franchise agreements withlocal retailers in cities such as Shanghai, Chongqing, Shenyang, and Beijing, opening stores based on area
license agreements where local partner companies have headquarter functions and are responsible for overall
operation and development in designated areas, and is accelerating the expansion of store opening areas andnumber of stores. Specifically, the number of stores in China surpassed 6,000 in August 2023, reaching
6,251 as of the end of November 2023 (a net increase of 631 stores from the end of the previous fiscal year).
The Target has set a goal of operating 10,000 stores in China in FY 2025, and to achieve this goal, the Target
is promoting product strategies such as strengthening private brands, as well as strengthening delivery, OMO(Note 7), and EC, in addition to accelerating store openings in new areas and expanding the scale of stores inareas where it has already opened stores. According to the Target, in the future, the Target may consider
various options relating to business strategies and capital policies to accelerate the growth of its Chinese
subsidiaries, including alliances with business partners, acceptance of external capital, public offerings,
business restructuring, and organizational restructuring, taking into account the state of its business andgeopolitical risks in China; however, no concrete decisions have been made as of today. Furthermore, inregions other than China, the Target operates 964 stores in Thailand, the Philippines, Indonesia, and Hawaii,
U.S.A. as of the end of November 2023. In Southeast Asia, where economic growth is remarkable, demandfor convenience stores is steadily growing, reflecting the expansion of the middle class, and the Target is
striving to expand the scale of its business with a target of 3,000 stores by FY 2025. In order to further
accelerate store openings, in addition to initiatives including alliances with leading local companies, in thePhilippines, the Target is promoting full-scale development of franchises, opening new stores in diverse forms
and locations, and in Indonesia, the Target is promoting the expansion of the area of store openings in major
cities other than Jakarta. In addition, the Target’s policy is to strengthen the appeal of its products by
expanding its lineup of private-brand products and over-the-counter fast food, and by strengthening vendor
policies.
(Note 7) “OMO” is an abbreviation of “online merges with offline” and refers to measures to eliminate thedistinction between sales through the Internet (electronic commerce) and sales at physical storesto encourage purchasing by customers.

84

According to the Target, in September 2020, the Target Group launched the “Lawson Group Sweeping
Transformation Executive Committee” to consider the implementation of a growth strategy for the entire
Target Group in light of the changing lifestyles and values of consumers due to the impact of the global spreadof COVID-19 in order to realize “Challenge 2025,” which is the medium-term management plan for FY
2021 to FY 2025 formulated in preparation for 2025, the 50th anniversary of the Target’s incorporation.
Under this committee, the Target Group is taking on challenges such as providing new forms of conveniences
and improving the job satisfaction of employees and store crews. Furthermore, the Target Group also aims
to achieve the performance indicators of Challenge 2025 (an ROE of 15% or more and an EPS of 500 yen
or more) through “enhancing corporate value,” “balancing growth investment and shareholder returns,” and“growth of individual group companies and growth of the LAWSON Group as a whole” throughconcentrated investment in its core domestic convenience store business. The Target Group plans to achievethese challenges two years ahead of schedule starting in FY 2025.
Against this backdrop, the environment surrounding the retail industry in which the Target operates ischaracterized by increasingly intense competition across business categories and increasingly diverse
consumer needs, as well as increases in various costs, including raw material, labor, and logistics costs. To
achieve sustained growth in these difficult circumstances, the Target believes that it should provide highvalue-added products and services in the Target Group’s various businesses, pursue further expansion of scaleand efficiency improvements, and deepen DX to achieve these goals. In addition, as demand for asustainable society increases, the Target has introduced the Environmental Vision “Lawson Blue Challenge
2050!” (Note 8) in order to contribute to the creation of a decarbonized society through de-carbon activities
and by reducing food waste and plastic use and to SDGs in response to intensifying environmental changes,
such as climate change, which is a social issue, and the Target views such environmental changes as businessissues that must be addressed with priority.
(Note 8) “Lawson Blue Challenge 2050!” was introduced in 2019 as the Target’s environmental visionthat focuses on three areas: (i) reducing CО2 emissions, (ii) reducing food waste, and (iii)
reducing plastic use (in containers and shopping bags).
The Offeror and the Target executed a capital and business alliance agreement in December 2019 with the
purpose of promoting data marketing that leverages the customer bases of both companies and of creating
new consumer experiences through the utilization of cutting-edge technologies. Through measures such as
collaborations of points, they have worked, among others, to expand their customer bases and enhanceservices for their members. In addition, in June 2022, the Offeror executed a business alliance agreementwith the Target, MC, and menu, Inc., an Offeror Group company, and has been expanding the delivery
business, that is one of the new consumer experiences at convenience stores.
In promoting such alliances, in late May 2023, the Offeror received a proposal from MC, the parent
company of the Target, to conduct a joint consideration on collaboration including the privatization of theTarget Shares by the three companies, i.e., the Offeror Related Parties and third party that was initiallyconsidering participating in the Transactions (the “Initial Partner Candidate”), with the Offeror and the Initial
Partner Candidate as the new partner candidates of the Target who can mutually utilize their own real store
network and customer bases and support the expansion and functional improvement of the Target’s network85

of real stores across Japan, and expansion of functions in the digital area, including utilization for the Target’s
digital marketing, (hereinafter the transaction toward the privatization of the Target Shares by the Offeror
Related Parties and the Initial Partner Candidate mentioned above is referred to as the “Transactions (Initial
Proposal)”). However, as described below, the Initial Partner Candidate declined the proposal to theTransactions (Initial Proposal) during the Transactions (Initial Proposal) review process.
According to MC, MC was incorporated on April 1, 1950, and listed its shares on the TSE and Osaka
Exchange, Inc. in 1954. According to MC, MC comprises a corporate group consisting of 1,367
consolidated subsidiaries and 410 equity method affiliates (as of September 30, 2023) including MC and theTarget (“MC Group”). MC has indicated that through its domestic and overseas network, MC operates ina wide range of industries in ten groups: natural gas, industrial materials, chemicals solution, mineral
resources, industrial infrastructure, automotive & mobility, food industry, consumer industry, power
solutions, and urban development, as well as the industry digital transformation group and next-generationenergy business group. According to MC, in addition to trading, MC also plays a role in development,
production, and manufacturing at sites around the world with various partners.
According to MC, MC has formulated the “Midterm Corporate Strategy 2024” for three years startingfrom FY 2022 in May 2022, which aims for the continuous creation of MC Shared Value by elevating the
MC Group’s collective capabilities in order to address societal challenges, with “fostering and leveraging
connections” of diverse businesses, intelligence, human resources, and stakeholders as the keywords. In
particular, according to MC, the Consumer Industry Group aims to provide consumers with highly attractive
consumption experiences and highly convenient services by collaborating with other industries, streamlining
the supply chain through DX, and providing products, services, and information that meet consumer needs
through digital marketing by leveraging MC’s far-reaching operations (contacts) with a wide range ofconsumers (customers) across real world and digital technology fields, based on the mission of “Creating arich life by connecting consumers and producers as well as the real world and digital technology fields.”
According to MC, in this context, the real store network centered on the Target and far-reaching operationsof digital services centered on Ponta are sources of value creation within the Consumer Industry Group; andsince the execution of a business alliance agreement between the Target and MC in February 2000, the Target
has been responsible for the most important business in the downstream business area of the MC Group.
According to MC, with respect to capital relationships between MC and the Target, MC Retail Investment
Co., Ltd. (“MCRI”), a wholly-owned subsidiary of MC, acquired 9,109,300 Target Shares (7.93% of theissued shares at that time) in February 2001, and a further 22,980,000 shares (21.36% of the issued shares atthat time) in August 2001 (resulting in the aggregate holding of 32,089,300 shares, including the9,109,300 shares acquired previously, accounting for 29.82% of the issued shares at that time), becoming theTarget’s largest shareholder. MC has indicated that in December 2004, MC purchased all of these Target
Shares from MCRI, and became the Target’s largest shareholder. According to MC, through market
purchase thereafter and though the Target a consolidated subsidiary in February 2017, MC has been
operating the Target’s business together with the Target for nearly a quarter of a century. According to MC,
as a result of the above, MC owns 50,150,100 Target Shares (Shareholding Ratio: 50.06%) as of today.
According to MC, MC recognizes that the Target, which continues to provide value to approximately 10
million customers per day using a network of approximately 14,600 stores across Japan, is a rare entity thatpossesses critical infrastructure functions that are indispensable to local customers. In addition, MC has

86expressed that it realizes that the Target’s business, which is a “hub of refreshment in every community,” hasbeen established through the efforts of many people, including franchisees and crews who support theTarget’s business operations, employees of the Target Group, and those who are engaged in logistics, vendor
business, etc. According to MC, MC believes that extensive contact with consumers and the customer baseof the Target’s business, which is essential to customers in this way, are valuable business resources that canserve as the foundation for the MC Group to develop new business concepts in downstream fields.
According to MC, MC will continue to seek to provide services that are convenient and profitable for
consumers, create new customer experiences, and support prosperous local communities, including thepossibility of collaboration between the Target’s business and the financial, advertising, and healthcare
businesses operated by the MC Group and in the urban development, electric power, mobility, and energy
fields.
On the other hand, according to MC, as it internally has considered measures to contribute to further
enhancing the Target’s corporate value, it had reached the conclusion by mid-May 2023 that as theenvironment surrounding the retail business is expected to change, including advances in digital technology,
diversification of consumer needs, future population decline, and intensifying competition, including in otherindustries, based on the recognition that providing services that integrate the real and digital more than everwill lead to consumer value, rather than stopping at the efforts made by the Target Group or the support
system for the Target by the MC Group, MC has come to believe that collaborating with new partners with acustomer base and rich digital knowledge will contribute to further enhancing the Target’s corporate value.
According to MC, in parallel with these ongoing in-house consultations, MC had an opportunity to conduct
initial exchanges of views with the Offeror in order to consider a wide range of possibilities for further
collaboration aimed at enhancing the Target’s corporate value, taking advantage of the entry into the capitaland business alliance agreement between the Offeror and the Target in December 2019. In addition,according to MC, MC had been conducting initial exchanges of views with the Initial Partner Candidate inorder to consider the possibility of a partnership between the Initial Partner Candidate and the Target, since
being approached by the Initial Partner Candidate in late December 2022 regarding joint consideration of thepossibility of collaboration through a partnership with the Target.
According to MC, MC began approaching the Initial Partner Candidate and the Offeror in mid-May 2023
and in late May 2023, respectively, to jointly consider a collaboration, including the privatization of the Target
Shares, given that, through these initial exchanges of views with the Offeror and the Initial Partner Candidate,
MC confirmed that both parties have a strong interest in business collaboration with the Target, and MC hascome to believe that it can aim to become a familiar presence for all customers by combining the digitalknowledge of the Offeror with the social infrastructure centered on the “real world” sites owned by theOfferor and the Initial Partner Candidate, and that these two companies could become new partner candidates
for further enhancing the Target’s corporate value. Thereafter, the Initial Partner Candidate indicated its
willingness to consider the Transactions (Initial Proposal) in mid-May 2023, and the Offeror indicated its
intention to agree to proceed with the concrete examination of the Transactions (Initial Proposal) in late June
2023, as described below. According to MC, MC intends to work together with the Offeror, with which
MC has reached an agreement to implement the Transactions, to enhance the corporate value of the Target,
which will celebrate its 50th anniversary in 2025, and further to take on the challenge of realizing a “hub of
refreshment in every community” with a view to the next 50 years.

87In response to this, the Offeror has repeatedly had initial discussions with MC regarding the significanceof the Transactions (Initial Proposal) and the potential synergies with the Target. The Offeror believes thatconvenience stores, which is the Target’s mainstay business, are an indispensable part of social
infrastructures, and that their importance has been increasing in recent years. On the other hand, the Offeror
believes that the diversification of consumer values, including lifestyle and consumer behaviors, triggered by
the spread of COVID-19, will necessitate the provision of new values beyond real stores in the future.
Under such business conditions, the Offeror recognizes that the Target has developed distinctive stores, suchas “LAWSON,” a convenience store with approximately 14,600 stores across Japan, “LAWSON STORE
100,” and “NATURAL LAWSON,” by adopting “community based × individual customer and individualstore-focused” as a strategy and has established its position as one of the leading convenience store chains inJapan through the provision of products and services closely tailored to local customers and that it has a wide
range of customer contact points, such as through Seijo Ishii, which is a supermarket with strong brand power
due to its high-quality original products, and the entertainment business, which sells tickets and operates
movie theaters, etc.
The Offeror recognizes that in order to continue to be an enterprise selected by customers in the future,
while responding to a declining domestic population and changes in the environment surrounding thecommunications industry, maintaining and strengthening contact points with customers will be matters ofeven more importance for management than ever before. The Offeror believes that collaborating with theTarget will enable the Offeror to build contact points with more customers and that by providing digital
support for the Target through the utilization of various assets, including communication systems owned by
the Offeror Group, the Offeror will be able to improve the convenience of the Target’s stores and provide
new value to customers.
Based on this consideration, the Offeror has come to believe that meeting the needs of local communities
and customers by deepening alliances between the Target, which has close contacts with “real” customers,
and the Offeror, which has close contacts with “digital” customers, is also consistent with the Offeror’s aim
to become a “Platformer Supporting Society.” Accordingly, in late June 2023, the Offeror has agreed to the
proposal from MC and has started to specifically examine the Transactions (Initial Proposal).
Since late June 2023, the Offeror has continued discussions with MC on the transaction structures andmanagement policies for the Transactions (Initial Proposal) by the three companies, including the Initial
Partner Candidate, through explanations regarding the Initial Partner Candidate from MC, and has also
considered specific collaborative measures with the Target in addition to deepening its understanding of theTarget through explanations regarding the Target from MC.
In late June 2023, the Offeror appointed Nishimura & Asahi (Gaikokuho Kyodo Jigyo) as a legal advisor
independent of the Offeror Related Parties and the Target, and in early September 2023, it appointed UBS
Securities Japan Co., Ltd. (“UBS Securities”) as a financial advisor independent of the Offeror Related Parties
and the Target. In addition, in mid-May 2023, MC appointed Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd. as a financial advisor independent of the Offeror Related Parties and the Target, and appointed
Nagashima Ohno & Tsunematsu as a legal advisor independent of the Offeror Related Parties and the Target.
After that, the three companies, including the Initial Partner Candidate, have held consultations on multiple
occasions since late August 2023 on fundamental matters such as the transaction structure and schedule, as
well as specific measures to enhance the corporate value of the Target. As a result, in late August 2023, the88Offeror has come to share with MC and the Initial Partner Candidate the view that the Target’s corporate
value could be enhanced by utilizing the networking, management resources, and knowledge possessed by
the Offeror Related Parties, the Initial Partner Candidate, and the Target in their respective industries, and bypromoting their business activities based on mutual collaboration. Specifically, for the Target Group’sbusiness activities that support customers nationwide through the provision of food and daily necessities, byutilizing the knowledge of the Offeror Group, an infrastructure company with leading domestic shares in thefield of communications; and the Initial Partner Candidate, and by the Offeror Related Parties, the Initial
Partner Candidate, and the Target cooperating in each area of “real,” aiming to expand networks and enhancestore functions through the mutual utilization of real stores; “digital,” aiming to expand the points economic
zone and develop real and digital integrated services; and “green,” aiming to promote measures to reduce theenvironmental burden, the parties came to believe that they could contribute to enhancing the Target’s
corporate value by creating value for consumers through the realization of a new business form that surpasses
conventional convenience stores based on the concept of “real × digital × green.” In addition, with regard
to the means to realize the above, the parties decided that it would be best to take private the Target Shares,
based on the view that accelerating the mutual utilization of management resources, implementing various
measures that lead to the growth of the Target over the medium to long term even if not directly related to theshort-term benefits of the Target, and building stronger alliances will ultimately contribute to theenhancement of the Target’s corporate value.
Based on the discussions as described above, the Offeror Related Parties and the Initial Partner Candidate
provided an initial proposal as of September 1, 2023, concerning the Transactions (Initial Proposal), to theTarget, and in early September 2023, the Target indicated its intention to establish a review system fordiscussions regarding the Transactions (Initial Proposal). After that, since mid-September 2023, the Offeror
Related Parties and the Initial Partner Candidate have commenced consultations on specific matters with theTarget toward the implementation of the Transactions (Initial Proposal). In addition, since mid-October
2023, the Offeror Related Parties and the Initial Partner Candidate have consecutively commenced due
diligence on the Target to deepen their understanding of the business environment, growth strategies,
management issue, etc., with respect to the Target and its business. At the same time, they confirmed
matters with respect to the fields of business, accounting, tax affairs, legal affairs, etc. of the Target.
In such situation, in late December 2023, the Offeror Related Parties were consulted by the Initial Partner
Candidate regarding the impact on the Transactions (Initial Proposal) due to the circumstances of the Initial
Partner Candidate. After discussions between the Offeror Related Parties and the Initial Partner Candidate,
the parties came to the conclusion that it would be difficult to continue with the Transactions (Initial
Proposal), and the Offeror Related Parties received an offer concerning the declining of the Transactions(Initial Proposal) from the Initial Partner Candidate. Based on this, the Offeror Related Parties consulted
again regarding the best way to enhance the Target’s corporate value. As a result, the Offeror Related Parties
reconfirmed their understanding that in order to enhance the corporate value of the Offeror Related Parties
and the Target, it is essential to mutually leverage their respective management resources, such as theirrespective human resources and know-how, etc., and to promote swift decision-making. On the other hand,
the Offeror Related Parties also confirmed that they are mutually aware of the issue that it is impossible todeny the risk of a short-term downturn in business results due to a temporary increase in costs incurred as aresult of taking various measures and the possibility of the adverse effect on stock prices resulting from them.
As a result, based on the belief that taking private the Target Shares without impairing benefits of the Target’s

89minority shareholders by providing the Target’s minority shareholders with appropriate and reasonable
opportunities to sell the Target Shares, taking various measures that lead to the growth of the Target over the
medium to long term, even if such measures may not be directly related to the short-term benefits of theTarget, and building stronger alliances, will ultimately contribute to the enhancement of the Target’s corporate
value, the Offeror Related Parties have determined that taking private the Target Shares and putting the Target
under a joint management structure by the Offeror Related Parties is the best option for enhancing thecorporate value of the Target.
After that, the Initial Partner Candidate officially provided the Target with a notice as of December 25,
2023 declining the proposal regarding the Transactions (Initial Proposal). In addition, as a result ofconsultation, the Offeror Related Parties provided the Target with a written proposal as of December 26, 2023
for a change in the initial proposal regarding the Transactions that changed the Transactions (Initial Proposal)
from a collaboration involving the privatization of the Target Shares by three companies (i.e., the Offeror
Related Parties and the Initial Partner Candidate) to a collaboration involving the privatization of the Target
Shares by two companies (i.e., the Offeror Related Parties).
In response to this, according to the Target, on January 4, 2024, the Target and the Special Committee held
an interview session with the Offeror Related Parties to review the impact of the changes to the initial
proposal. In the interview, according to the Target, the Target and the Special Committee received an
explanation from the Offeror that due to the Initial Partner Candidate’s decline, the business alliance mattersproposed by the Initial Partner Candidate will be excluded from the scope of the proposal, but as the voting
rights ratio of the Offeror after the Transactions will be raised to 50.00%, with respect to the business alliancematters proposed by the Offeror, the Offeror will be able to give prompt and generous support based on astronger commitment; therefore, they believed that it would be worthwhile to deepen consideration anddiscussions on the details of the proposed changes to the initial proposal, and decided to continue to consider
the Transactions.
The Offeror Related Parties expect synergies in each of the “real × digital × green” fields through thecreation of new consumer value that combines “real × digital × green” and by making the Offeror Related
Parties the Target’s only shareholders through the Transactions and conducting business operations in an
integrated manner with the Target, and they are considering the following matters as measures to realize thosesynergies. Further, the Offeror Related Parties may consider entering into an alliance with a new outside
partner as a future option after the Transactions is completed in order for the Target to continue to growsustainably in the future as well. However, as of today, no consideration has been given to entering into analliance with a specific outside partner, nor is there a specific policy for inviting an outside partner.
(i)

Specific Measures and Synergies in Real Areas
The Offeror Related Parties believe it possible to build a leading domestic real store network
regarding the Offeror’s and the Target’s approximately 16,800 real stores, which are the strengths ofboth the Target and the Offeror (Target stores: approximately 14,600; au shops: approximately 2,200).
On that basis, the Offeror Related Parties expect to improve the Target’s competitive advantage by
providing new services that utilize the functions and commodities of the Offeror Related Parties andthe Target.
Specifically, as measures to expand the networks and strengthen the functions of the Target’s stores,
the Offeror Related Parties are considering providing new services by combining the Offeror’s assets,90

such as the handling of Target goods and services at au shops, the provision of commodities andservices centered on communications of the Offeror at Target stores (such as merchandise-based
communication services), and the provision of services that are more in tune with customers’ lives
through the introduction of online remote customer service.
(ii)

Specific Measures and Synergies in Digital Areas
The Offeror Related Parties expect that the Target will improve customer satisfaction and loyalty
by utilizing the largest customer database in Japan resulting from the shared member information(attributes, purchase information, etc.) held by the Offeror Related Parties and the Target.
Specifically, the Offeror Related Parties are considering conducting new customer referrals to
Target stores from the Offeror’s membership base and developing and offering new services formembers aimed at expanding use of Target stores by existing members of the Offeror and the Target.
The Offeror Related Parties are also considering establishing a data-sharing and analytical systemwith the Offeror to expand the Target’s earnings, as well as utilizing the Offeror’s DX knowledge andtechnologies for Target store management issues, such as optimized operation of Target stores.

(iii)

Specific Measures and Synergies in Green Areas
By making maximum use of the business foundations of the Offeror Related Parties and the Target
and promoting initiatives to decarbonize the Target’s business, the Offeror Related Parties expect torealize a green and sustainable society.
Specifically, the Offeror Related Parties are considering promoting the greening of Target storesby installing solar panels at Target stores and having electricity be generated by the Offeror. In
addition, the Offeror Related Parties will consider promoting a circular economy business, such as
manufacturing biodiesel whose raw material is waste oil made by Target stores and contributing toachievement of “Lawson Blue Challenge 2050!” introduced by the Target by replacing plastic
containers and plastic bottle materials with bio-materials in Target’s business.

In parallel, the Offeror and MC have repeatedly and continuously held consultations with the Target from
mid-October 2023 on a specific business alliance, such as the management structure and business policies
following completion of the Transactions. After several consultations, as of February 6, 2024, the Offeror
Related Parties and the Target executed the Capital and Business Alliance Agreement, and the Offeror Related
Parties executed the Shareholders Agreement. For summaries of the Capital and Business AllianceAgreement and the Shareholders Agreement, please refer to “(II) Shareholders Agreement” and “(III) Capitaland Business Alliance Agreement” under “(6) Material agreements relating to the Tender Offer” below. In
connection with the execution of the Capital and Business Alliance Agreement, it was agreed that the businessalliance agreement between MC and the Target on September 16, 2016, will be terminated subject to theeffectiveness of the Capital and Business Alliance Agreement.
In addition, based on the results of due diligence on the Target conducted from mid-October 2023 to late
January 2024, with respect to the tender offer price in the Tender Offer (the “Tender Offer Price”), the Offeror
made an initial proposal (the “Initial Proposal”) in writing to the Target on December 26, 2023, making theTender Offer Price per Target Share be 8,650 yen (8,650 yen is the amount calculated by adding an 18.64%
premium to 7,291 yen, which was the closing price of the Target Shares on the Prime Market of the TSE on

91

December 25, 2023 (such date being the business day immediately preceding December 26, 2023, when the
proposal was made) (rounded to the second decimal place; hereinafter the same applies in the calculation of
the premium rate), an 18.98% premium to 7,270 yen, which was the simple average of the closing prices forthe one month ending on December 25, 2023 (rounded to the nearest whole number; hereinafter the same
applies in the calculation of the simple average of closing prices), a 21.80% premium to 7,102 yen, which
was the simple average of the closing prices for the three months ending on December 25, 2023, and a
23.64% premium to 6,996 yen, which was the simple average of the closing prices for the six months ending
on December 25, 2023), making the tender offer price per Share Option (the “Share Option Price”) be 1 yen,and making the Tender Offer Price per Target Share relating to American Depositary Shares represented byAmerican Depositary Receipts be 8,650 yen. In response to the Initial Proposal, the Offeror received arequest from the Target on December 27, 2023 to consider revising the Tender Offer Price from theperspective of considering the interests of the Target’s minority shareholders.
In response to that request from the Target, the Offeror made a second proposal (“Proposal No. 2”) in
writing to the Target on January 4, 2024 setting the Tender Offer Price per Target Share at 9,000 yen(9,000 yen is the amount calculated by adding a 23.58% premium to 7,283 yen, which was the closing priceof the Target Shares on the Prime Market of the TSE on December 29, 2023 (such date being the business
day immediately preceding January 4, 2024, when the proposal was made), a 24.09% premium to 7,253 yen,which was the simple average of the closing prices for the one-month period ending on December 29, 2023,
a 26.32% premium to 7,125 yen, which was the simple average of the closing prices for the three-month
period ending on December 29, 2023, and a 28.13% premium to 7,024 yen, which was the simple averageof the closing prices for the six-month period ending on December 29, 2023), setting the Share Option Priceat 1 yen, and setting the Tender Offer Price per Target Share relating to American Depositary Shares
represented by American Depositary Receipts at 9,000 yen. In response to Proposal No. 2, the Offeror
received a request from the Target on January 6, 2024 to once again consider revising the Tender Offer Pricefrom the perspective of considering the interests of the Target’s minority shareholders.
In response to that request from the Target, the Offeror made a third proposal (“Proposal No. 3”) in writing
to the Target on January 11, 2024 setting the Tender Offer Price per Target Share at 9,500 yen (9,500 yen is
the amount calculated by adding a 29.85% premium to 7,316 yen, which was the closing price of the Target
Shares on the Prime Market of the TSE on January 10, 2024 (such date being the business day immediately
preceding January 11, 2024, when the proposal was made), a 31.51% premium to 7,224 yen, which was thesimple average of the closing prices for the one-month period ending on January 10, 2024, a 32.50%
premium to 7,170 yen, which was the simple average of the closing prices for the three-month period endingon January 10, 2024, and a 34.35% premium to 7,071 yen, which was the simple average of the closing prices
for the six-month period ending on January 10, 2024), setting the Share Option Price at 1 yen, and setting theTender Offer Price per Target Share relating to American Depositary Shares represented by American
Depositary Receipts at 9,500 yen. In response to Proposal No. 3, the Offeror received a request from theTarget on January 12, 2024 to once again consider revising the Tender Offer Price from the perspective ofconsidering the interests of the Target’s minority shareholders.
In response to that request from the Target, the Offeror made a fourth proposal (“Proposal No. 4”) in writing
to the Target on January 18, 2024 setting the Tender Offer Price per Target Share at 10,000 yen (10,000 yen is
the amount calculated by adding a 20.63% premium to 8,290 yen, which was the closing price of the Target
Shares on the Prime Market of the TSE on January 17, 2024 (such date being the business day immediately

92

preceding January 18, 2024, when the proposal was made), a 35.23% premium to 7,395 yen, which was thesimple average of the closing prices for the one-month period ending on January 17, 2024, a 37.76% premium
to 7,259 yen, which was the simple average of the closing prices for the three-month period ending on
January 17, 2024, and a 40.61% premium to 7,112 yen, which was the simple average of the closing prices forthe six-month period ending on January 17, 2024), setting the Share Option Price at 1 yen, and setting theTender Offer Price per Target Share relating to American Depositary Shares represented by American
Depositary Receipts at 10,000 yen. In response to Proposal No. 4, the Offeror received a request from theTarget on January 24, 2024 to consider further raising the Tender Offer Price in exchange for an opinion infavor of and a recommendation to tender in the Transactions, from the perspective of considering the interestsof the Target’s minority shareholders and in light of the recent growth in the Target’s business, including thedetails of the “Consolidated Financial Results [IFRS] for the Third Quarter of the Fiscal Year Ending February
29, 2024” announced by the Target on January 12, 2024 (the “Target’s Financial Results”), and the continued
rise in the current stock price.
In response to that request from the Target, the Offeror made a fifth proposal (“Proposal No. 5”) in writing
to the Target on January 26, 2024 setting the Tender Offer Price per Target Share at 10,200 yen (10,200 yen
is the amount calculated by adding a 23.40% premium to 8,266 yen, which was the closing price of the Target
Shares on the Prime Market of the TSE on January 25, 2024 (such date being the business day immediately
preceding January 26, 2024, when the proposal was made), a 31.61% premium to 7,750 yen, which was thesimple average of the closing prices for the one-month period ending on January 25, 2024, a 37.99%
premium to 7,392 yen, which was the simple average of the closing prices for the three-month period endingon January 25, 2024, and a 42.04% premium to 7,181 yen, which was the simple average of the closing prices
for the six-month period ending on January 25, 2024), setting the Share Option Price at 1 yen, and setting theTender Offer Price per Target Share relating to American Depositary Shares represented by American
Depositary Receipts at 10,200 yen. In response to Proposal No. 5, the Offeror received a request from theTarget on January 28, 2024 to consider further raising the Tender Offer Price from the perspective ofconsidering the interests of the Target’s minority shareholders, for the opinion in favor of, and arecommendation to tender in, the Transactions.
In response to that request from the Target, the Offeror made a sixth proposal (“Proposal No. 6”) in writing
to the Target on January 29, 2024, setting the Tender Offer Price per Target Share at 10,290 yen (10,290 yen
is the amount calculated by adding a 24.20% premium to 8,285 yen, which was the closing price of the Target
Shares on the Prime Market of the TSE on January 26, 2024 (such date being the business day immediately
preceding January 29, 2024, when the proposal was made), a 31.91% premium to 7,801 yen which was thesimple average of the closing prices for the one-month period ending on January 26, 2024, a 38.81%
premium to 7,413 yen which was the simple average of the closing prices for the three-month period endingon January 26, 2024, and a 43.08% premium to 7,192 yen which was the simple average of the closing prices
for the six-month period ending on January 26, 2024, setting the Share Option Price at 1 yen, and setting theTender Offer Price per Target Share relating to American Depositary Shares represented by American
Depositary Receipts at 10,290 yen. In response to Proposal No. 6, the Offeror received a request from theTarget on January 29, 2024 to consider further raising the Tender Offer Price from the perspective of fully
securing the interests of the Target’s minority shareholders for the opinion in favor of, and a recommendation
to tender in, the Transactions.

93

In response to that request from the Target, the Offeror made a seventh proposal (“Proposal No. 7”) in
writing to the Target on January 30, 2024 setting the Tender Offer Price per Target Share at 10,350 yen(10,350 yen is the amount calculated by adding a 23.01% premium to 8,414 yen, which was the closing priceof the Target Shares on the Prime Market of the TSE on January 29, 2024 (such date being the business day
immediately preceding January 30, 2024, when the proposal was made), a 30.60% premium to 7,925 yen,which was the simple average of the closing prices for the one-month period ending on January 29, 2024, a
39.19% premium to 7,436 yen, which was the simple average of the closing prices for the three-month period
ending on January 29, 2024, and a 43.67% premium to 7,204 yen, which was the simple average of theclosing prices for the six-month period ending on January 29, 2024), setting the Share Option Price at 1 yen,and setting the Tender Offer Price per Target Share relating to American Depositary Shares represented byAmerican Depositary Receipts at 10,350 yen. In response to Proposal No. 7, on January 31, 2024, theOfferor received a request from the Target that the Offeror will consider further raising the Tender Offer Pricefor the opinion in favor of, and a recommendation to tender in, the Transactions from the perspective of fully
securing the interests of the Target’s minority shareholders.
In response to that request from the Target, the Offeror made the final proposal (“Final Proposal”) in
writing to the Target on January 31, 2024 setting the Tender Offer Price per Target Share at 10,360 yen(10,360 yen is the amount calculated by adding a 23.00% premium to 8,423 yen, which was the closing priceof the Target Shares on the Prime Market of the TSE on January 30, 2024 (such date being the business day
immediately preceding January 31, 2024, when the proposal was made), a 30.27% premium to 7,953 yen,which was the simple average of the closing prices for the one-month period ending on January 30, 2024, a
38.89% premium to 7,459 yen, which was the simple average of the closing prices for the three-month period
ending on January 30, 2024, and a 43.61% premium to 7,214 yen, which was the simple average of theclosing prices for the six-month period ending on January 30, 2024), setting the Share Option Price at 1 yen,and setting the Tender Offer Price per Target Share relating to American Depositary Shares represented byAmerican Depositary Receipts at 10,360 yen. In response to the Final Proposal, on February 2, 2024, theOfferor received a response from the Target stating that it views the Tender Offer Price in the Final Proposal
as the maximum price that the Offeror could offer and accepts the Tender Offer Price in the Final Proposal.
As a consequence of the above, the Offeror and the Target agreed on February 2, 2024 to set the Tender
Offer Price per Target Share at 10,360 yen (10,360 yen is the amount calculated by adding a 19.99% premium
to 8,634 yen, which was the closing price of the Target Shares on the Prime Market of the TSE on February
1, 2024 (such date being the business day immediately preceding February 2, 2024, when the agreement wasmade), a 29.32% premium to 8,011 yen, which was the simple average of the closing prices for the onemonth period ending on February 1, 2024, a 38.10% premium to 7,502 yen, which was the simple averageof the closing prices for the three-month period ending on February 1, 2024, and a 43.17% premium to7,236 yen, which was the simple average of the closing prices for the six-month period ending on February
1, 2024), the Share Option Price at 1 yen, and the Tender Offer Price per Target Share relating to American
Depositary Shares represented by American Depositary Receipts at 10,360 yen. The Offeror also agreed
with MC on February 6, 2024 to set the Tender Offer Price per Target Share at 10,360 yen, the Share Option
Price at 1 yen, and the Tender Offer Price per Target Shares relating to American Depositary Shares
represented by American Depositary Receipts at 10,360 yen.
Therefore, on February 6, 2024, the Offeror executed the Master Agreement and decided to conduct theTender Offer as part of the Transactions, provided that the Conditions Precedent are satisfied (or waived by94

the Offeror Related Parties) given that it is expected that a certain period of time is required to complete theCompetition Law Procedures.
Subsequently, the Offeror informed the Target on February 21, 2024 that the Offeror expects theCompetition Law Procedures to be completed by late March 2024, and based on that expectation, the Tender
Offer is expected to be commenced on March 28. In addition, on March 22, 2024, the Offeror informed theTarget that the Tender Offer is scheduled to commence on March 28, 2024 on the assumption that theConditions Precedent had been satisfied since the Competition Law Procedures have been completed.
Further, the Offeror received a report from the Target today that as of today, there are no material facts
regarding the Target’s business, etc. that have not been disclosed, or facts in connection with theimplementation of a tender offer, etc. with respect to the Target’s Share Certificates that have not been
disclosed.
As stated in “(1) Outline of the Tender Offer” above, the Offeror has confirmed that all of the Conditions
Precedent have been satisfied; and therefore, today, the Offeror decided to commence the Tender Offer on
March 28, 2024.
(II) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by theTarget(i) Background of the proposal by the Offeror Related Parties and establishment of a review system
According to the Target, as described in “(I) Background, purposes, and decision-making process leading
to the decision to conduct the Tender Offer” above, upon the receipt of a written initial proposal regarding
the Transactions (Initial Proposal) on September 1, 2023, the Target appointed SMBC Nikko Securities Inc.
(“SMBC Nikko Securities”) as its financial advisor and third-party valuator independent of the Offeror
Related Parties and the Target with respect to the Transactions (Initial Proposal), after examining the expertiseand past performances of SMBC Nikko Securities, to receive advice and assistance from a financial
perspective, including advice on the calculation of the value of the Target Shares and the policy fornegotiation with the Offeror Related Parties, and appointed Anderson Mori & Tomotsune Gaikokuho-KyodoJigyo (“Anderson Mori & Tomotsune”) as its external legal advisor, after examining the expertise and past
performances of Anderson Mori & Tomotsune, to receive legal advice, including advice on the measures tobe taken to ensure the fairness of the procedures for the Transactions (Initial Proposal), the procedures for theTransactions (Initial Proposal), and the method and process of decision-making by the Target concerning theTransactions (Initial Proposal). Because MC, which is one of the Offeror Related Parties, owns 50,150,100
Target Shares (Shareholding Ratio: 50.06%) and is the parent company of the Target, and therefore, theTransactions (Initial Proposal) including the Tender Offer may fall under important transactions with
controlling shareholders, and therefore the Transactions (Initial Proposal) may fall under the type oftransaction involving the issue of structural conflicts of interest and information asymmetry with minority
shareholders, in order to address these issues and ensure the fairness of the Transactions (Initial Proposal),
the Target’s board of directors, based on the advice of Anderson Mori & Tomotsune, immediately set about
establishing a system to review, negotiate, and make decisions regarding the Transactions (Initial Proposal)
from the perspective of enhancing the corporate value of the Target and securing the interests of the minority
shareholders of the Target, from a stand point independent of the Offeror Related Parties.
Specifically, according to the Target, as described in “(ii) Establishment of independent special committee
at the Target and receipt of a written report from the special committee” under “(Measures to ensure the95fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures
to avoid conflicts of interest)” under “(II) Background of calculation” under “(4) Basis for calculation of theprice of tender offer” under “2. Summary of Tender Offer” below, the Target began preparations to establish
the Special Committee comprised of the Target’s independent outside directors and independent outside
auditors from early September 2023. Then, according to the Target, the Target, by resolution at its board of
directors meeting held on September 13, 2023, established a special committee comprised of three (3)members, Ms. Miki Iwamura (the Target’s independent outside director), Ms. Satoko Suzuki (the Target’s
independent outside director), and Ms. Yuko Gomi (the Target’s independent outside auditor) (the “Special
Committee”; for details of background of establishment, background of consideration, and details of decisionof the Special Committee, please refer to “(ii) Establishment of independent special committee at the Target
and receipt of a written report from the special committee” under “(Measures to ensure the fairness of theTender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid
conflicts of interest)” under “(II) Background of calculation” under “(4) Basis for calculation of the price oftender offer” under “2. Summary of Tender Offer” below). In addition, according to the Target, the Target
resolved to consult the Special Committee on (i) whether the purposes of the Transactions are appropriate
and reasonable (including whether the Transactions would contribute to the Target’s corporate value); (ii)whether the fairness and appropriateness of the terms and conditions of the Transactions (including the Tender
Offer Price) are ensured; (iii) whether due attention is paid in the Transactions to the interests of the Target’s
shareholders through fair procedures; (iv) whether it is deemed appropriate for the Target’s board of directors
to express an opinion in favor of the Tender Offer to recommend that the Target’s shareholders tender in theTender Offer and to recommend that the owners of American Depositary Receipts deliver the American
Depositary Receipts to the Depositary Banks in advance and receive delivery of the Target Shares represented
by those American Depositary Receipts to tender their shares in the Tender Offer and that it would leave thedecision as to whether to tender shares in the Tender Offer to the judgment of the Share Option Holders; and(v) whether implementation of the Transactions would be considered disadvantageous to the Target’s
minority shareholders from perspectives other than (i) to (iv) (collectively, the “Consultation Matters”) (forthe method of resolution of the Target’s board of directors, please refer to “(viii) Unanimous approval of all
disinterested directors of the Target and the opinion of all auditors of the Target that they have no objection”
under “(Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of theTender Offer Price and measures to avoid conflicts of interest)” under “(II) Background of calculation” under“(4) Basis for calculation of the price of tender offer” under “2. Summary of Tender Offer” below).
According to the Target, as described in “(ii) Establishment of independent special committee at the Target
and receipt of a written report from the special committee” under “(Measures to ensure the fairness of theTender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid
conflicts of interest)” under “(II) Background of calculation” under “(4) Basis for calculation of the price oftender offer” under “2. Summary of Tender Offer” below, the Target has also received approval from theSpecial Committee to appoint SMBC Nikko Securities as its financial advisor and third-party valuator, andAnderson Mori & Tomotsune as its legal advisor. In addition, according to the Target, as described in “(ii)Establishment of independent special committee at the Target and receipt of a written report from the special
committee” under “(Measures to ensure the fairness of the Tender Offer, such as measures to ensure thefairness of the Tender Offer Price and measures to avoid conflicts of interest)” under “(II) Background of
calculation” under “(4) Basis for calculation of the price of tender offer” under “2. Summary of Tender Offer”

96below, on September 13, 2023, based on the above authority, the Special Committee appointed Nakamura,Tsunoda & Matsumoto as its independent legal adviser, and appointed Daiwa Securities Co., Ltd. (“Daiwa
Securities”) as its independent financial adviser and third-party valuator.
Furthermore, according to the Target, the Target has established a system within the Target to review,negotiate, and make decisions regarding the Transactions from a standpoint independent of the Offeror
Related Parties (including the scope and duties of the Target’s officers and employees to be involved in thereview, negotiation, and decisions regarding the Transactions) and has received confirmation from the Special
Committee that such review system has no problem from the perspectives of independence and fairness (fordetails on such review system, please refer to “(vii) Establishment of independent review system at theTarget” under “(Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairnessof the Tender Offer Price and measures to avoid conflicts of interest)” under “(II) Background of calculation”
under “(4) Basis for calculation of the price of tender offer” under “2. Summary of Tender Offer” below).
(ii) Process of review and negotiation
According to the Target, the Target received from SMBC Nikko Securities a report on the results ofvaluation of the Target Shares and advice on the policy of the negotiation with the Offeror, as well as legal
advice from Anderson Mori & Tomotsune on measures to ensure the fairness of the procedures for theTransactions, and based on these, the Target carefully considered whether to implement the Transactions andwhether the terms and conditions of the Transactions, including the Tender Offer Price, were appropriate.
According to the Target, the Target held an interview session on October 12, 2023 to give an explanationon the Target’s corporate profile to the Offeror Related Parties and the Initial Partner Candidate, and since
mid-October 2023, the Target has held discussions and negotiations with the Offeror Related Parties and theInitial Partner Candidate with respect to the significance and purpose of the Transactions (Initial Proposal)
and the plans for management and business operation after the Transactions (Initial Proposal). Specifically,
according to the Target, on October 6, 2023, the Target sent a questionnaire concerning the Transactions(Initial Proposal) to the Offeror Related Parties and the Initial Partner Candidate, and on October 27, 2023,
the Target received a written response to the questionnaire from the Offeror Related Parties and the Initial
Partner Candidate, and verbally confirmed the intent of such response on October 30, 2023. According to
the Target, based on the response received from the Offeror Related Parties and the Initial Partner Candidate,
the Target sent an additional questionnaire concerning the Transactions (Initial Proposal) to the Offeror
Related Parties and the Initial Partner Candidate on November 28, 2023. According to the Target, after
receiving the written response to the questionnaire from the Offeror Related Parties and the Initial Partner
Candidate on December 4, 2023, the Target verbally confirmed the intent of such response on December 13,
2023.
In addition, according to the Target, on November 17, 2023, the Special Committee sent a questionnaire
concerning the Transactions (Initial Proposal) to the Offeror Related Parties and the Initial Partner Candidate,and on December 4, 2023, after receiving the written response to the questionnaire from the Offeror Related
Parties and the Initial Partner Candidate, the Special Committee verbally confirmed the intent of such
response on December 7, 2023.
Thereafter, according to the Target, the Target received an offer to decline the proposals on the Transactions(Initial Proposal) from the Initial Partner Candidate as of December 25, 2023, and received from the Offeror
Related Parties a written proposal for partial changes to the initial proposal regarding the Transactions (Initial97Proposal) as of December 26, 2023. According to the Target, on January 4, 2024, the Target and the Special
Committee had an interview session with the Offeror Related Parties to review the impact of the changes tothe initial proposal. In the interview session, according to the Target, the Target and the Special Committee
received an explanation from the Offeror that due to the Initial Partner Candidate’s decline, the businessalliance matters proposed by the Initial Partner Candidate will be excluded from the scope of the proposal,
but as the voting rights ratio of the Offeror after the Transactions will be raised to 50.00%, with respect to thebusiness alliance matters proposed by the Offeror, the Offeror will be able to give prompt and generous
support based on a stronger commitment; therefore, they believed that it would be worthwhile to deepen
consideration and discussions on the details of the proposed changes to the initial proposal, and decided tocontinue to consider the Transactions.
At the same time, according to the Target, the Target has been discussing specific business alliances with
the Offeror Related Parties since October 2023, including the management system and business policies after
the Transactions. According to the Target, after several discussions, the Target and the Offeror Related
Parties executed the Capital and Business Alliance Agreement as of February 6, 2024. For an outline of theCapital and Business Alliance Agreement, please refer to “(iii) Capital and Business Alliance Agreement” in“(6) Material agreements relating to the Tender Offer” below. As a result of the execution of the Capitaland Business Alliance Agreement, the business alliance agreement as of September 16, 2016, between MC
and the Target was decided to be dissolved on condition that the Capital and Business Alliance Agreement
becomes effective.
According to the Target, on December 26, 2023, the Target received in writing the Initial Proposal
regarding the Tender Offer Price from the Offeror. According to the Target, on December 27, 2023, in
response to the Initial Proposal, the Target requested the Offeror to reconsider an increase of the Tender Offer
Price, because the Tender Offer Price in the Initial Proposal is insufficient to recommend that the Target’s
minority shareholders tender their shares. According to the Target, on January 4, 2024, the Target received
Proposal No. 2 in writing from the Offeror in response to such request. According to the Target, on January
6, 2023, in response to Proposal No. 2, the Target requested that the Offeror consider an increase of the Tender
Offer Price, because the Tender Offer Price in Proposal No. 2 was insufficient to recommend that the Target’s
minority shareholders tender their shares. According to the Target, on January 11, 2024, the Target received
Proposal No. 3 in writing from the Offeror in response to such request. According to the Target, on January
12, 2024, in response to Proposal No. 3, the Target requested that the Offeror consider an increase of theTender Offer Price, because the Tender Offer Price in Proposal No. 3 was insufficient to recommend that theTarget’s minority shareholders tender their shares. According to the Target, on the January 18, 2024, theTarget received Proposal No. 4 in writing from the Offeror in response to such request. According to theTarget, on January 24, 2023, in response to Proposal No. 4, the Target requested that the Offeror consider anincrease of the Tender Offer Price for the Opinion in favor of and Planned Commencement of a Tender Offerin view of the current growth of the Target’s business performance, including Target’s Financial Results, andcontinuous increase in the price of Target’s shares, because the Tender Offer Price in Proposal No. 4 wasinsufficient to recommend that the Target’s minority shareholders tender their shares. According to theTarget, on January 26, 2024, the Target received Proposal No. 5 in writing from the Offeror in response tosuch request. According to the Target, on January 28, 2024, in response to Proposal No. 5, the Target
requested that the Offeror consider an increase of the Tender Offer Price for the Opinion in favor of andPlanned Commencement of a Tender Offer, because the Tender Offer Price in Proposal No. 5 was insufficient98to recommend that the Target’s minority shareholders tender their shares. According to the Target, onJanuary 29, 2024, the Target received Proposal No. 6 in writing from the Offeror in response to such request.
According to the Target, on January 29, 2024, in response to Proposal No. 6, the Target requested that theOfferor consider a further increase of the Tender Offer Price for the Opinion in favor of and Planned
Commencement of a Tender Offer, because the Tender Offer Price in the Proposal No. 6 was insufficient torecommend that the Target’s minority shareholders tender their shares. According to the Target, on January
30, 2024, the Target received Proposal No. 7 in writing from the Offeror in response to such request.
According to the Target, on January 31, 2024, in response to Proposal No. 7, the Target requested that theOfferor consider a further increase of the Tender Offer Price for the Opinion in favor of and Planned
Commencement of a Tender Offer, because the Tender Offer Price in the Proposal No. 7 was insufficient torecommend that the Target’s minority shareholders tender their shares. According to the Target, on January
31, 2024, the Target received the Final Proposal from the Offeror in response to such request. According to
the Target, on February 2, 2024, in response to the Final Proposal, the Target responded to the Offeror that
the Target agrees to set the Tender Offer Price per Target Share at 10,360 yen, the Share Option Price at 1
yen, and the Tender Offer Price per Target Share relating to American Depositary Shares represented byAmerican Depositary Receipts at 10,360 yen.
According to the Target, in the course of the review and negotiation described above, the Special
Committee received reports from the Target, the Target’s financial advisor, SMBC Nikko Securities, and theSpecial Committee’s financial advisor, Daiwa Securities, confirmed such reports, and expressed its opinions
as appropriate. Specifically, according to the Target, the Target received confirmation and approval fromthe Special Committee on the reasonableness of the details, material conditions precedent, and process of
preparation of the business plan prepared by the Target for the period from the fiscal year ending February
2024 to the fiscal year ending February 2028 (the “Business Plan”). In addition, the Target’s financial
advisor, SMBC Nikko Securities, conducted negotiations with the Offeror in accordance with the policy ofnegotiation deliberated and determined by the Special Committee, and immediately reported to the Special
Committee each time the Target received a proposal from the Offeror regarding the Tender Offer Price andresponded in accordance with the instructions of the Special Committee.
On February 5, 2024, the Target received a written report (the “Written Report Dated February 5, 2024”)
from the Special Committee which stated that, as of the date of the report, (a) the Transactions would
contribute to the Target’s corporate value and the purposes of the Transactions are appropriate and reasonable;(b) the fairness and appropriateness of the terms and conditions of the Transactions (including the tender offer
price in the Tender Offer) are ensured; (c) due consideration is given in the Transactions to the interests of
the Target’s shareholders through fair procedures; (d) it is appropriate for the Target’s board of directors to
express an opinion in favor of the Tender Offer, to recommend that the Target’s shareholders tender in theTender Offer, and to recommend that the owners of American Depositary Receipts deliver the American
Depositary Receipts to the Depositary Banks in advance and receive delivery of the Target Shares represented
by those American Depositary Receipts in order to tender their shares in the Tender Offer, and that it would
leave the decision as to whether to tender shares in the Tender Offer to the judgment of the Share Option
Holders; and (e) in addition to (a) to (d) above, the implementation of the Transactions would not be
considered disadvantageous to the Target’s minority shareholders (for a summary of the Written Report Dated
February 5, 2024, please refer to “(ii) Establishment of independent special committee at the Target and99

receipt of a written report from the special committee” under “(Measures to ensure the fairness of the Tender
Offer, such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts ofinterest)” under “(II) Background of calculation” under “(4) Basis for calculation of the price of tender offer”
under “2. Summary of Tender Offer” below).
(iii) Details of the Target’s decision making
According to the Target, based on the above circumstances, the Target carefully considered and discussed
at its board of directors meeting held on February 6, 2024 whether the Transactions, including the Tender
Offer, would contribute to the enhancement of the Target’s corporate value and whether the terms andconditions of the Transactions, including the Tender Offer Price, were appropriate, taking into account thelegal advice received from Anderson Mori & Tomotsune, the advice received from SMBC Nikko Securities,
and the details of a share valuation report concerning the results of valuation of the Target Shares submitted
on February 5, 2024 (the “Share Valuation Report (Nikko Securities)”) (please refer to “(iv) Receipt of ashare valuation report from an independent financial advisor and a third-party valuator of the Target” below
under “(Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of theTender Offer Price and measures to avoid conflicts of interest)” under “(II) Background of calculation” under“(4) Basis for calculation of the price of tender offer” under “2. Summary of Tender Offer” below), with theutmost respect for the details of the Special Committee’s judgment expressed in the Written Report Dated
February 5, 2024.
As a result, according to the Target, the Target has concluded that the Transactions will contribute to theenhancement of the Target’s corporate value as described below.
According to the Target, as described in “(I) Background, purposes and decision-making process leading
to the decision to conduct the Tender Offer” above and the following synergies related to the Transactions
below, the retail industry in which the Target operates is facing a severe situation characterized byincreasingly intense competition across business categories and increasingly diverse consumer needs, as well
as expected increases in various costs, including raw material, labor, and logistics costs. According to theTarget, the Target believes that in order to achieve sustained growth in such situation, it is necessary to provide
high-value-added products and services in each of the Target Group’s businesses, pursue further expansionof scale and efficiency improvements, and deepen DX to achieve these goals, and as consumer values
continue to diversify, including changes in lifestyles and consumer behavior and other diversifying consumer
values triggered by the recent expansion of the new coronavirus infections, the Target has begun to transform
itself into a “Real × Tech Convenience” that breaks away from a business model that relies solely on
conventional real stores. However, according to the Target, the Target believes that the implementation ofeach of the initiatives to transform into “Real × Tech Convenience” will contribute to enhancing the Target’s
corporate value in the medium to long term, but in the short term, initial costs and investments will be required
and they may have an impact on the Target’s financial condition and business performance; therefore, there
is a possibility that the Target will not be able to obtain an adequate assessment from the capital markets inthe short term, and it will be difficult for the Target to implement each of the initiatives simultaneously andpromptly while maintaining the Target’s listing and pursuing the interests of minority shareholders, and thisalso has limitations from the perspective of contributing to enhancing the Target’s corporate value.
Accordingly, according to the Target, on February 6, 2024, the Target determined that the best way to enhance
the Target’s corporate value is to quickly and steadily maximize the following synergies in (A) to (G) and to100

accelerate the Target’s growth by the Offeror making the Offeror Related Parties the sole shareholders of theTarget, more promptly and boldly promoting the transformation into “Real × Tech Convenience,” andactively implementing each of the initiatives to drastically strengthen the Target’s businesses andmanagement foundation in response to rapid changes in the business environment.
According to the Target, the specific synergies that the Target considers to be achievable through theTransactions are as follows.
(A) Accelerate transformation into “Real × Tech Convenience” through the use of management resources
According to the Target, as a company that responds to change, the Target has constantly captured changes
in the environment around the world, created businesses from the perspective of “convenience,” and has
grown through the appreciation of customers. In recent years, the Target has taken advantage of thediversification of consumer values, including changes in lifestyles and consumer behavior triggered by the
spread of new coronavirus infectious diseases, and has revamped its products and refurbished its stores. On
the other hand, in pursuing further “convenience,” the Target believes that by utilizing stores for “real”
shopping venues as EC centers, the Target can develop the quickest global delivery service in the world(Quickest E Commerce service: QEC). By making the best of Tech, the Target seeks to take on thechallenge of becoming “Real × Tech Convenience” equipped with QEC from a “real” retailer through Tech.
In order to accelerate the expansion of the new service based on Tech, QEC, by establishing a system byaround spring 2024 so that consumers can check the product inventories of each of the Target’s stores on theirsmartphones, the Target aims to enable approximately 14,600 inventory bases of the Target’s stores, which
will be the base of QEC, and approximately 3,000 different items to be directly linked to consumers, andproducts to be delivered in as little as 15 minutes. According to the Target, the Target believes that by further
utilizing the resources and assets held by the Offeror Group, which has strengths in the digital field, QEC
will become even more convenient and easy to use for customers, and it is highly likely to accelerate andstabilize the growth of business. Specifically, the Target will promote QEC that enables provision of
products to customers at the fastest speed in the convenience store industry to accelerate the transformation
into “Real × Tech Convenience” by strengthening the technological structure, including the development ofsystems through the dispatch of engineers and other human resources from the Offeror, and enhancing theOfferor’s customer base of more than 13 million subscription service members and the digital marketingsystem that utilizes high-resolution location-based big data unique to a telecommunications company withapproximately 31 million customers.
(B) Strengthen profitability by sharing customer baseAccording to the Target, in recent years, as marketing methods, in addition to conventional advertising
methods such as TV commercials, and new digital contact points such as SNS and a company’s own
applications, retail media that utilize data obtained at real stores as a result of the development of DX anddistribute ads tailored to customer needs are attracting attention. According to the Target, the Target also
aims to expand its marketing business using consumer data collected across stores and the Group businesses,
as well as its owned media, through the “Unified Use of Group Data Project” in the “Lawson Group
Sweeping Transformation Executive Committee.” The Target believes that for the growth of such business,
the Target needs to strengthen the Target Group’s membership base and expand loyal customers.

101

In order to achieve these goals, the Target intends to utilize the Offeror’s base of approximately 31 million
customers and promote high-resolution marketing measures. Specifically, in addition to reaching morecustomers and attracting more customers through new customer referrals from the Offeror Group’s economic
area and referrals to individual stores by utilizing location information, the Target intends to create new value
in the application and membership domains through development and provision of new services. By
responding in a one-stop manner to collecting, gathering, analyzing, and visualizing a wealth of big data andby maximizing the value of data through promotion of these measures, the Target will be able to consider
promoting cross-selling and developing new businesses and services, and expects to expand its marketingbusiness.
(C) Coexistence with local communities by providing social infrastructure utilizing cutting-edge
technologies
According to the Target, convenience store operators have established a position as social infrastructurethat is indispensable for everyday life, and the Target, which started as “handyman in the community,” isdetermined to continue pursuing and advancing the “hub of refreshment in every community” from thecustomer’s perspective, in order to ensure its position as an essential party of the community that provides
support for residents. As a provider of social infrastructure, the Target believes that in the context of theneed to resolve issues faced by local communities, to revitalize local communities, and to further promotecoexistence with local communities, it is necessary to create future convenience stores by utilizing cuttingedge technologies.
For example, with the social implementation of drones accelerating, it is expected that the Offeror Group’s
sophisticated drone technology can be used to resolve issues including the depopulation and aging ofcommunities, such as by improving convenience for consumers in regions without stores. In addition, the5G network and satellite communications technology of the Offeror, a telecommunications operator, can beused to develop stores and provide products in augmented reality and virtual reality linked to its own apps
through metaverse services, including provision of medical services such as remote health checkups throughvital sensing. Through the provision of services that support various aspects of life in this way, the Target
hopes to encourage innovation into lifestyle experiences and behaviors associated with the evolution oftechnology, aims to resolve social issues, and hopes to build standards for future convenience stores.
(D) Strengthen the business foundation by utilizing management resources such as advanced humanresources and know-how
According to the Target, the Target believes that through the use of digital and technology, it is required toconcentrate its management resources on the evolution of its core business, domestic convenience stores, andthe growth of its portfolio business, which has strong group synergies. On the other hand, the Target
believes that it needs to develop and secure digital human resources that can utilize AI and the like more
effectively, and to accumulate know-how in various business areas. Under these circumstances, the Target
believes that by promoting human resource exchanges between the Offeror Group, the MC Group, and theTarget, and by mutually providing human resource support, including the secondment and dispatch of
employees, it will be able to take measures against the normalization of labor shortages and develop humanresources. In addition, the Target can expect to strengthen the Target Group’s portfolio and maximize the102Group’s synergies through the utilization of know-how of the financial business developed by the Offeror
Group, collaboration in the entertainment field, and the ongoing sharing of the MC Group’s global network.
(E) Strengthen cooperation in the environmental field to realize a decarbonized society
According to the Target, as the importance of sustainability, represented by climate-change, is recognized
as an urgent issue, the Target is taking steps to address this issue as a priority management issue. In
particular, in response to environmental changes, the Target has introduced its environmental vision, “Lawson
Blue Challenge 2050!,” aiming to realize a decarbonized society through decarbonization activities andreduction of food loss and plastic consumption. Specifically, by 2030, the Target has set goals for (i) a 50%
reduction in CO2 emissions (per store compared to 2013 levels), (ii) a 50% reduction in food loss (compared
to 2018 levels), and (iii) a 30% reduction in plastic consumption (compared to 2017 levels), and it is currently
seeing steady progress toward these goals (reduction by 30.6% for (i) above, reduction by 23.1% for (ii)above, and reduction by 25.1% for (iii) above (actual results in 2022) have been achieved).
By utilizing the functions of the Offeror Group and the MC Group to promote the use of renewable energy
generated by solar panels, the purchase of food products with reduced consumption prices near their
expiration dates using vast location data and purchasing data, and the replacement of plastic containers andPET bottle materials with biomass materials, the Target believes that it will be able to achieve the goal aboveby 2030, which is a milestone and to further strengthen and accelerate its green and sustainable initiatives
toward by 2050, achieving each KPI of (i) a reduction of CO2 emissions by 100% (per store; compared to2013 levels), (ii) a reduction of food loss by 100% (compared to 2018 levels), and (iii) 100% use of ecofriendly materials for containers and packaging of original products.
(F) Growth in the businesses of group companies
According to the Target, in the retail finance business for the development of the “Real × Tech
Convenience,” collaboration of the financial know-how of MC and the Offeror Group, including FinTech, is
expected.
In addition, the entertainment business is one of the key businesses to realize Target’s corporate philosophyof “Creating Happiness and Harmony in our Communities.” In this field, the Target believes that contents
and functions pertaining to digital technology possessed by MC and the Offeror Group will accelerate theTarget’s growth in this business area. In addition, the Target believes that in the Target’s supermarket
business and overseas business, smart digital capabilities and global expansion capabilities are essential; andthat it can accelerate the growth of these businesses by forming alliances with both companies.
(G) Reduction of listing maintenance costs and operational burden of the management division andreallocation of resources
In recent years, according to the Target, it has been pointed out that there has been an increase in the humanand economic costs required to maintain listing, and the Target recognizes that it cannot deny the possibility
that such an increase in costs will also be a further burden on its management. The Target believes thattaking the Target Shares private through the Transactions will allow it to avoid the costs associated withmaintaining listing and allocating resources to the various key initiatives described above.

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Generally, according to the Target, the disadvantages of taking shares private include becoming unable toraise funds through equity financing from the capital markets and becoming unable to enjoy the benefits thathave been enjoyed as a listed company, such as improvement of name recognition and social credibility,
thereafter. Nevertheless, the Target believes that it will be able to utilize the necessary funding fromfinancial institutions that are the Target’s business partners even after the Transactions have been
implemented. In addition, the Target’s name recognition, branding, and social credibility, which are key torecruitment of human resources in the Target, are largely acquired and maintained through its businessactivities; and it is able to acquire and maintain them through implementation of businesses even after theTransactions are implemented. Therefore, the Target believes that the impact of delisting will be limited.
In addition, the Target has granted the Share Options to the Target’s directors and executive officers ascompensation equivalent to retirement benefits; however, in order not to harm the interests of the Share
Option Holders through implementation of the Transactions, since it is planned to introduce a new retirement
bonus system to provide economic benefits to be enjoyed by the Share Option Holders, it is determined that
there is little likelihood that the Target’s corporate value will be impaired by the employment separation of
the Target’s directors and executive officers due to the implementation of the Transactions.
Based on the above, the Target’s board of directors determined that the advantages of taking the Target
Shares private outweighed its disadvantages, and that taking the Target Shares private through theTransactions including the Tender Offer would contribute to enhancing the Target’s corporate value.
Additionally, according to the Target, the Target has determined, based on the following points, that
10,360 yen per share, the Tender Offer Price, is a reasonable price that secures the benefit to be enjoyed by
the Target’s minority shareholders and that other conditions of the Tender Offer are fair; therefore, the Tender
Offer provides the Target’s minority shareholders with a reasonable opportunity to sell the Target Shares at a
price with an appropriate premium.
(a)

The Tender Offer Price is the price agreed upon by the Target as a result of sufficient negotiations
with the Offeror through substantial involvement of the Special Committee, after sufficientmeasures have been taken in the Target to secure the fairness of the trade terms of theTransactions, including the Tender Offer Price described in “(Measures to ensure the fairness of
the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures
to avoid conflicts of interest)” under “(II) Background of calculation” under “(4) Basis forcalculation of the price of tender offer” under “2. Summary of Tender Offer” below.

(b)

The Tender Offer Price exceeds the upper limit of the range based on the Market price analysis
and falls within the range based on the Discounted Cash Flow analysis (the “DCF analysis”) asa result of calculation of the value of the Target Shares calculated by SMBC Nikko Securities in
the Share Valuation Report (Nikko Securities) described in “(iv) Receipt of a share valuation
report from an independent financial advisor and a third-party valuator of the Target” under“(Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of
the Tender Offer Price and measures to avoid conflicts of interest)” under “(II) Background of
calculation” under “(4) Basis for calculation of the price of tender offer” under “2. Summary of104

Tender Offer” below.
(c)

In the Transactions, although this Tender Offer Period is designated as 21 business days, because
the period from the announcement of the tender offer plan to the commencement of the actual
tender offer is long, the opportunity to make an appropriate decision on tendering their shares in
the Tender Offer by minority shareholders and the opportunity for a tender offer for Target Sharesby a person other than the Offeror are secured.

(d)

In the Transactions, the lower limit of the number of shares to be purchased in the Tender Offer
does not meet the “majority of minority” (Majority of Minority). However, because otheradequate fairness security measures have been taken in the Transactions, the fact that the lower
limit of the number of shares to be purchased is not set at “majority of minority” (Majority of
Minority) is not considered to impair the fairness of the Tender Offer.

(e)

In the Transactions, the amount of money to be delivered to each shareholder as consideration in
the Share Consolidation will be calculated to be the same as the Tender Offer Price multipliedby the number of Target Shares owned by each shareholder of the Target (except for Offeror
Related Parties and Target) which were not tendered in the Tender Offer, and thus, consideration
is given so that the minority shareholders will have the opportunity to make an appropriate
decision on whether or not to tender their shares in the Tender Offer, and so as not to cause any
coercion.

(f)

It has been determined that the fairness and appropriateness of the terms and conditions of theTransactions (including the Tender Offer Price) is ensured in the Written Report Dated February
5, 2024 acquired from the Special Committee, as described in “(ii) Establishment of independent
special committee at the Target and receipt of a written report from the special committee” under“(Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of
the Tender Offer Price and measures to avoid conflicts of interest)” under “(II) Background of
calculation” under “(4) Basis for calculation of the price of tender offer” under “2. Summary of
Tender Offer” below.

According to the Target, based on the above, at the Target’s board of directors meeting on
February 6, 2024, the Target resolved that in the opinion of the Target at such time, if the Tender Offer iscommenced, the Target would express its opinion in favor of the Tender Offer and would recommendthat the Target shareholders tender in the Tender Offer, and recommend that the holders of the American
Depositary Receipts tender in the Tender Offer after delivering the American Depositary Receipts to the
Depositary Bank in advance and receiving the delivery of the Target Shares pertaining to the American
Depositary Shares represented by the American Depositary Receipts, and resolved that it will leave theholders of the Share Options to decide whether or not to tender in the Tender Offer.
According to the Target, in addition, the Target’s board of directors has also resolved that, when
the Tender Offer is commenced, the Target’s board of directors will request that the Special Committee
established by the Target examine whether there is any change in the opinion expressed by the Special

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Committee to the Target’s board of directors as of February 5, 2024, and, if there is no change, shallstate as such to the Target’s board of directors and, if there is any change, the Special Committee shallstate its opinion after the change, and, based on the opinion of the Special Committee, the Target’s boardof directors will express its opinion on the Tender Offer again when the Tender Offer is commenced.
Subsequently, on February 21, 2024, according to the Target, the Target received notification fromthe Offeror that the Offeror expects the Competition Law Procedures to be completed by late March
2024, and based on that expectation, the Tender Offer is expected to be commenced on March 28, 2024.
In addition, on March 22, 2024, the Target received a notification from the Offeror that the Tender Offeris scheduled to commence on March 28, 2024 on the assumption that the Conditions Precedent had beensatisfied since the Competition Law Procedures have been completed.
In response, according to the Target, the Target asked the Special Committee on March 25, 2024
to consider whether there were any changes in the opinions expressed to the Target’s board of directors
on February 5, 2024 and requested that the Special Committee advise the Target’s board of directors
accordingly if there were no changes, or if any changes should be made, to state the amended opinion.
On March 26, 2024, the Special Committee submitted the Written Report Dated March 26, 2024 statingthat it is considered that there was no need to change the contents of the report that the Special Committee
made to the Target’s board of directors on February 5, 2024. Therefore, the Target once again carefully
discussed and considered the terms and conditions regarding the Tender Offer, taking into account thedetails of the written report and changes in the Target’s business performance and market environment
after the board of directors meeting held on February 6, 2024.
As a result, according to the Target, the Target believes that, even as of today, the implementationof the Transactions would contribute to enhancing the corporate value of the Target, that the purpose of
the Transactions and the significance and necessity of achieving that purpose will only increase and will
not diminish, and that there were no factors that would change the Target’s judgment regarding theTender Offer as of February 6, 2024. Accordingly, at the board of directors meeting held today, theTarget once again resolved to the effect that it shall express its opinion in favor of the Tender Offer andrecommend that the Target’s shareholders tender their shares in the Tender Offer, that it recommends that
holders of American Depositary Receipts tender in the Tender Offer by delivering their American
Depositary Receipts to the Depositary Bank in advance and receiving delivery of the Target Shares
related to such American Depositary Shares represented by the American Depositary Receipts, and thatit leaves to the Share Option Holders the decision as to whether to tender in the Tender Offer. Further,according to the Target, the Target reported to the Offeror today that as of today, there are no material
facts regarding the Target’s business, etc. that have not been disclosed, or facts in connection with theimplementation of a tender offer, etc. with respect to the Target’s Share Certificates that have not been
disclosed.
Further, for details of the Target’s board of directors’ decision-making process, please refer to“(viii) Unanimous approval of all disinterested directors of the Target and the opinion of all disinterested
auditors of the Target that they have no objection” under “(II) Background of calculation” under “(4)Basis for calculation of the price of tender offer” under “2. Summary of Tender Offer” below.
(III) Management policy following the Tender Offer106

After the Tender Offer is successfully completed, the Offeror Related Parties are scheduled to appoint
persons designated by them as officers of the Target with the aim of implementing measures to realize each
effect described in “(I) Background, purposes and decision-making process leading to the decision to conduct
the Tender Offer” above and establishing an appropriate management structure for this purpose. However,the specific details of those measures, the specific time of appointment of those officers, and the candidates
themselves have not yet been determined. The detailed management structure of the Target, including thesepoints, will be determined in consultation with the Target after the Tender Offer is successfully completed.
The Offeror entered into the Shareholders Agreement with MC as of February 6, 2024, where they agreed
that, as directors of the Target after completion of the Transactions, MC and the Offeror will each appoint
three directors, and MC and the Offeror will each appoint one representative director of the Target. For asummary of the Shareholders Agreement, please refer to “(II) Shareholders Agreement” in “(6) Material
agreements relating to the Tender Offer” below.
In addition, with regard to the Share Options, since the Share Option Price is 1 yen and as stated in “(4)Policies on organizational restructuring, etc. after the Tender Offer (matters concerning “two-stepacquisition”)” below, in the event that the Tender Offer has been successfully completed but the Offeror
Related Parties are unable to acquire all of the Share Options in the Tender Offer and the Share Options are
not exercised and remain outstanding, the Offeror Related Parties plan to request that the Target implement
reasonably necessary procedures for carrying out the Transactions, such as recommending that the Share
Option Holders forfeit their Share Options. Therefore, in order not to harm the interests of the Share Option
Holders, the Offeror plans to make a determination regarding the introduction of a new retirement benefit
system that provides economic benefits to be enjoyed by the Share Option Holders in consultation with theTarget and the Share Option Holders promptly after the settlement commencement date of the Tender Offer
after the Tender Offer has been successfully completed. The determination regarding such retirement
benefit system, which takes into account the fact that Share Options were granted as officers’ compensationequivalent to retirement benefits and is intended to not harm the interests of the Share Option Holders, isplanned to be made in consultation with the Target and the Share Option Holders after the Tender Offer has
been successfully completed, and is expected to be made independent of the Share Option Holders tendering
shares in the Tender Offer and without requiring that the Share Option Holders tender their shares in theTender Offer. Therefore, the Offeror believe that such retirement benefit system is not contrary to the
purport of the regulation on uniformity of the tender offer price.
(3) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender
Offer Price and measures to avoid conflicts of interest
As of today, the Offeror Related Parties and the Target have implemented the measures set forth in (i) to (x)below in the Transactions, including the Tender Offer, with a view to ensuring the fairness of the Tender Offerfrom the time of the Tender Offer, eliminating arbitrariness in decision-making concerning the Transactions,securing the fairness, transparency, and objectivity of the decision-making process, and avoiding any doubt of
a conflict of interest given the fact that the Target is a consolidated subsidiary of MC, which is one of theOfferor Related Parties, and that the Transactions, including the Tender Offer, constitute transactions thattypologically contain structural conflicts of interest issues and information asymmetry with minority
shareholders. The measures implemented by the Target described below are based on the explanation madeby the Target.

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In addition, as of today, the Offeror Related Parties hold 52,260,100 Target Shares (Shareholding Ratio:
52.16%) in total. Therefore, the Offeror Related Parties believe that setting a “Majority of Minority” minimum
amount would destabilize the successful completion of the Tender Offer, which in turn might not serve theinterests of minority shareholders who wish to tender in the Tender Offer, and have not set a “Majority of
Minority” minimum amount in the Tender Offer. However, considering that the Offeror Related Parties andthe Target have taken the measures from (i) through (x) below, the Offeror Related Parties believe that due
consideration was given to the interests of the Target’s minority shareholders.
(i)
Receipt of a share valuation report from an independent third-party valuator by the Offeror;(ii)
Establishment of an independent special committee at the Target and receipt of a report from thespecial committee;(iii)
Advice from an independent legal advisor by the Target;(iv)
Receipt of a share valuation report from an independent financial advisor and a third-party valuatorby the Target;(v)
Advice from an independent legal advisor by the Special Committee;(vi)
Receipt of a share valuation report and the Fairness Opinion (as defined in “(iv) Receipt of a sharevaluation report and the Fairness Opinion from an independent third-party valuator retained by theSpecial Committee” under “(Measures to ensure the fairness of the Tender Offer, such as measures
to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest)” under“(II) Background of calculation” under “(4) Basis for calculation of the price of tender offer” under“2. Summary of Tender Offer” below; hereinafter the same) from a third-party valuator by theSpecial Committee;(vii)
Establishment of an independent review system at the Target;(viii) Receipt of the unanimous approval of all disinterested directors of the Target and the opinion of all
auditors of the Target that they have no objection;(ix)
Establishment of measures to secure purchase opportunities from other purchasers; and(x)
Establishment of measures to ensure opportunities for the Target’s shareholders to make anappropriate decision on whether to tender their shares in the Tender Offer.
For details of the above, please refer to “(Measures to ensure the fairness of the Tender Offer, such asmeasures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest)” in “(II)Background of calculation” under “(4) Basis for calculation of the price of tender offer” under “2. Summaryof Tender Offer” below.
(4) Policies on organizational restructuring, etc. after the Tender Offer (matters concerning “two-stepacquisition”)
If the Offeror is unable to acquire all of the Target’s Share Certificates in the Tender Offer, the Offeror jointlywith MC plans to implement a series of procedures to make the Offeror Related Parties the only shareholdersof the Target through the method described below following the successful completion of the Tender Offer.
Specifically, the Offeror jointly with MC plans to request that the Target convene an extraordinary
shareholders’ meeting (the “Extraordinary Shareholders’ Meeting”), at which the matters for resolution shall
include consolidation of the Target Shares (the “Share Consolidation”), and on the condition that the Share
Consolidation takes effect, a partial amendment of the articles of incorporation to abolish the provision
concerning the share unit number. In addition, the Offeror jointly with MC plans to request that the record

108date of the Extraordinary Shareholders’ Meeting be a date close to the commencement of the settlement of theTender Offer. Each of the Offeror Related Parties intend to vote in favor of each of the above proposals at theExtraordinary Shareholders’ Meeting. If the proposal for the Share Consolidation is approved at theExtraordinary Shareholders’ Meeting, then on the date on which the Share Consolidation takes effect, theshareholders of the Target will hold the Target Shares in the number corresponding to the Share Consolidation
ratio approved at the Extraordinary Shareholders’ Meeting. If any fraction of less than one share results fromthe implementation of the Share Consolidation, an amount in cash equal to the purchase price to be obtainedby selling to the Offeror the Target Shares equivalent to the total number of such fractional shares will bedelivered to the shareholders in accordance with the procedures provided in Article 235 of the Companies Act
and other relevant laws and regulations. With respect to the purchase price of the Target Shares equivalent tosuch total number of fractional shares, it is scheduled to be set in such a way so that, as a result of selling theseshares, the amount of money to be delivered to the Target shareholders who did not tender in the Tender Offer(however, excluding the Offeror Related Parties and the Target) will be the same as the price obtained bymultiplying the Tender Offer Price for the Target Shares by the number of Target Shares held by each suchshareholder. After the above process, a court petition to obtain permission for a voluntary sale will be filed.
The Offeror intends to request together with MC that the Target use the Consolidation Ratio as the ratio of the
Share Consolidation. The Consolidation Ratio will be determined such that the number of Target Shares heldby Target shareholders who did not tender in the Tender Offer (excluding the Offeror Related Parties) will bea fraction of less than one share so that the Offeror Related Parties will hold all of the Target Shares.
The Target Shares subject to the Share Consolidation include the Target Shares represented by American
Depositary Receipts and held by the Depositary Bank. Therefore, if the above determination is made, thenumber of Target Shares held by the Depositary Bank after the Share Consolidation is also expected to be afraction of less than one share. In this case, according to the American Depositary Receipts Notifications (asdefined in “(III) Depositary receipts for share certificates” under “(3) Price of tender offer” under “2. Summaryof Tender Offer” below; hereinafter the same), each of the Depositary Banks may cancel the American
Depositary Receipts and deliver to each holder of such American Depositary Receipts a portion of the cash
received by the Depositary Bank (converted into U.S. dollars) in accordance with the number of American
Depositary Shares represented by the American Depositary Receipts held by such holder after deducting
Depositary Bank’s fees and applicable taxes, in accordance with the provisions stated in the American
Depositary Receipts.
As for provisions of the Companies Act that aim to protect the rights of minority shareholders in connection
with the above, the Companies Act provides that if fractional shares of less than one share are created as a resultof the Share Consolidation, then the shareholders of the Target may request that the Target purchase all of thefractional shares less than one share that they hold at a fair price in accordance with Articles 182-4 and 182-5of the Companies Act and other relevant laws and regulations and may file a court petition to determine theprice of the Target Shares. The court will eventually determine the purchase price per share via this method.
If a holder of American Depositary Receipts intends to make a share purchase demand and a petition for thedetermination of the price, such holder required to make a share purchase demand and a petition for
determination of the price in accordance with Articles 182-4 and 182-5 of the Companies Act and other relevantlaws and regulations following the delivery of such holder’s American Depositary Receipts to the Depositary
Bank and receipt by such holder of the corresponding Target Shares deposited with the Depositary Bank.

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If the Tender Offer is successfully completed, but not all of the Share Options have been tendered andpurchased in the Tender Offer and such Share Options are not exercised and remain outstanding, the Offeror
Related Parties plan to request that the Target implement reasonably necessary procedures for the execution of
the Transactions, such as recommending that the Share Option Holders forfeit their Share Options. According
to the Target, if the Target receives such a request, the Target intends to cooperate with such request promptly
after the settlement commencement date of the Tender Offer.
The procedures above may take time to implement, and the implementation method may change, dependingon the situation, such as the amendment, effectuation, and interpretation by the authorities of relevant laws andregulations. Even in such a case, if the Tender Offer is successfully completed, the method of eventually
delivering money to the Target shareholders who did not tender in the Tender Offer will be adopted, and insuch case, the amount of money delivery to the Target’s shareholders will be calculated to be equal to theTender Offer Price multiplied by the number of Target Shares held by the shareholders of the Target. In suchcases, the amount of money to be delivered to the Depositary Banks in respect of the Target Shares represented
by American Depositary Receipts and held by the Depositary Banks will be the same. According to theAmerican Depositary Receipts Notifications, the Depositary Banks may cancel the American Depositary
Receipts and deliver to each holder of such American Depositary Receipts a portion of the cash received by
the Depositary Bank (converted into U.S. dollars in accordance with the number of Target Shares represented
by the American Depositary Receipts held by such holder after deducting Depositary Bank’s fees andapplicable taxes.
For the specific procedures and time of implementation of the above, the Offeror will consult with the Target,
and the Target will promptly announce the details once they have been determined.
(5) Possibility of delisting and reason therefor
The Target Shares are listed on the Prime Market of the TSE as of today. Because the Offeror has not set
a maximum number of shares to be purchased in the Tender Offer, the Target Shares may become delisted
through the prescribed procedures in accordance with the TSE’s delisting criteria depending on the results of
the Tender Offer. In addition, even if such delisting criteria are not met as at the time of successful completionof the Tender Offer, in the case where the Tender Offer is successfully completed, a series of procedures isplanned to be implemented so that the Offeror Related Parties will be the only shareholders of the Target, as
explained in “(4) Policies on organizational restructuring, etc. after the Tender Offer (matters concerning “twostep acquisition”)” above. Therefore, in such cases, the Target Shares will be delisted through the prescribed
procedures in accordance with the TSE’s delisting criteria. After the delisting of the Target Shares, the Target
Shares may no longer be traded on the Prime Market of the TSE.
(6) Material agreements relating to the Tender Offer(I) Master Agreement
As described in “(1) Outline of the Tender Offer” above, the Offeror executed the Master Agreement withMC as of February 6, 2024, with respect to the Transactions. A summary of the Master Agreement is asfollows.
(i) Matters regarding the Transactions
The Offeror Related Parties will conduct the Transactions as follows:(A)
The Offeror will conduct the Tender Offer for privatization of the Target. MC will not110tender the Target Shares held by MC in the Tender Offer.
(B)
If not all of the Target Share Certificates are acquired in the Tender Offer even if the Tender
Offer was successfully completed, the Squeeze-out Procedure will be conducted in order to make theOfferor Related Parties the only Target shareholders and to privatize the Target Shares.

The Offeror will conduct the Tender Offer subject to the satisfaction of all of the Conditions
Precedent or waiver by the Offeror Related Parties, in accordance with applicable laws,
regulations, etc. and the Master Agreement.

Until the Transactions have been completed, the Offeror Related Parties will not directly or
indirectly make any proposal, solicitation, provision of information, or consultation with any third
party regarding transactions that virtually compete with, conflict with, or infringe on theTransactions, such as implementation of the tender offer subject to the Target Share Certificates,or make it difficult to implement the Transactions, or which have a concrete possibility of doingso (the “Competing Transactions”); and they will not conduct any act that conflicts with or
infringes on the Transactions such as an agreement related to the Competing Transactions(including the exercise or non-exercise of voting rights at the Target’s shareholders meeting thatconflict with or infringe on the Transactions); if they receive a proposal for Competing
Transactions from any third party or come to know that there is such proposal, they willreasonably promptly notify the other party to that effect and of the details of the relevant proposal,and consult on responses to the Competing Transactions in good faith.
In the Tender Offer, solicitation of the Target’s shareholders located in the United States will be
conducted, tenders for the Tender Offer from the United States will be accepted (however, theOfferor will not accept tenders for American Depositary Receipts, and will accept only tenders for
the Target Shares related to American Depositary Shares represented by American Depositary
Receipts), and the Offeror Related Parties will provide mutual cooperation (including reasonably
necessary cooperation by each party’s subsidiaries and affiliates) to provide responses incompliance with the U.S. Securities Act.
(ii)

Other mattersIn addition, under the Master Agreement, (A) MC shall be obliged to use its best effort to theextent reasonably possible and commercially and reasonably necessary to ensure that the Target
will perform its business operations and manage and operate its assets substantially the same as
before the execution date of the Master Agreement and within the scope of ordinary business andthe Target will not perform certain acts from the execution date of the Master Agreement to thecompletion of settlement of the Tender Offer, except for the case necessary for conducting theTransactions or agreed between the Parties in accordance with the Master Agreement, (B) the
Offeror Related Parties shall be obliged to make the same efforts as above (A) from thecompletion of settlement of the Tender Offer to the completion of the Transaction, (C) the Offeror
Related Parties shall have an obligation to consult in good faith on the business operations of theTarget Group from the completion of settlement of the Tender Offer to the completion of theTransactions, (D) the Offeror Related Parties shall be obliged not to transfer their Target Sharesfrom the execution date of the Master Agreement to the completion of the Transactions, unlessotherwise following the Definitive Agreements or with the prior written consent of another party,111

(E) the Offeror Related Parties, as soon as practicable after the execution of the Master
Agreement, shall be obliged to legally complete the Competition Act Response Procedure, towhich they have obligations in relation to the implementation of the Transactions in accordancewith laws and regulations, (F) the Offeror Related Parties shall respectively make representations
and warranties (Notes 1 and 2), and (G) the Offeror Related Parties shall be obliged tocompensate for damages, etc., in the event of breach of the representations and warranties or the
obligations under the Master Agreement.
(Note 1) Regarding MC, MC generally represents and warrants under the Master Agreement as
to (a) the validity of its survival and powers, (b) the validity of its power to enter intoand perform the Definitive Agreements and performance of necessary procedures, (c)the enforceability of the Definitive Agreements, (d) no conflict of laws or regulations,(e) no legal insolvency procedures, and (f) the possession of the Target Shares. In
addition, regarding the Target Group, MC represents and warrants as to (a) the validityof the survival and powers of the Target, (b) the total number of issued shares of theTarget, the number of share options, etc., (c) no legal insolvency procedures, (d)non-applicability of anti-social forces, and (e) accuracy of information disclosed by theTarget Group.
(Note 2) With respect to the Offeror, the Offeror generally represents and warrants under the
Master Agreement as to (a) the validity of its survival and powers, (b) the validity of its
power to enter into and perform the Definitive Agreements and performance ofnecessary procedures, (c) the enforceability of the Definitive Agreements, (d) no
conflict of laws or regulations, (e) no legal insolvency procedures, and (f) the
possession of the Target Shares.
(II) Shareholders Agreement
As described in “(1) Outline of the Tender Offer” above, the Offeror executed the Shareholders Agreementwith MC as of February 6, 2024, with respect to the joint operation of the Target Group. A summary of the
Shareholders Agreement is as follows. Except for certain general and other provisions, the Shareholders
Agreement shall be effective when the Squeeze-out Procedure is completed and the voting rights ratio of MC
and the Offeror in Target becomes 50.00%, respectively.
(i) Matters concerning the organization and operation of the Target, etc.
Organizational planning of the Target (board of directors, board of company auditors, companies
with financial auditors)

Changes in the articles of incorporation, regulations of the board of directors, and regulations of
the management meetingThe right to appoint the Target’s directors (the number of directors shall be six; MC and theOfferor will appoint three each)The right to appoint the Target’s representative directors (the number of representative directors
shall be two; MC will appoint one representative director and president and the Offeror will
appoint one representative director and vice president; to be agreed through faithful consultations
as to which party will appoint the representative director and president and the representative112

director and vice president for fiscal years following the fiscal year in which the five-year periods
after the date of completion of the Transactions has elapsed)Establishment of the management meeting of the TargetEstablishment of the steering committee between the Offeror Related Parties for five years after
the completion of the Transaction
The right to appoint auditors of the Target (the number of auditors shall be four, of which one
each shall be appointed by MC and the Offeror, and the remaining auditors shall be agreed uponafter faithful consultations)
Sincere consultation about the business plan and the annual budget proposal of the Target
Matters related to the distribution policy of the Target (100% in principle, based on theInternational Financial Reporting Standards (IFRS))
Procedures in the case of deadlock(ii) Matters concerning transfer of shares, etc.

Restrictions on transfer of the Target SharesPreferred negotiating rights and the tag along right of the Offeror Related Parties after five years
from the date of completion of the Transaction
Call options and put options, etc. in the breach of the Shareholders Agreement(iii) Other matters
・ In addition, under the Shareholders Agreement, the Offeror Related Parties agree on (A)representations and warranties, (B) in the case where the nominated director concurrently holds thepost of officer or employee of a company, etc. carrying out a business that may compete with thebusiness of the Target, the obligation to have the director obtain approval after submitting a reportto the Target’s board of directors, (C) the prohibition of headhunting of the Target Group employees,
etc., and (D) the obligation to provide information on the Target Group, etc.
(III) Capital and Business Alliance Agreement
As described in “(1) Outline of the Tender Offer” above, the Offeror executed the Capital and Business
Alliance Agreement with MC and the Target as of February 6, 2024 with respect to the capital and businessalliance between the Offeror Related Parties and the Target Group after the Transactions. A summary of theCapital and Business Alliance Agreement is as follows.
(i) Purposes
・ Maximize corporate value of the Target Group by strengthening each business of the Target Groupto realize a new-generation “hub of refreshment in every community” that creates new consumer
value by combining “real × digital × green” by leveraging leading contact points with consumers
in the country
・ Expand the business foundations of the MC Group and the Offeror Group and create new value
through growth of the Target Group(ii) Details of the capital alliance・ Establishment of the capital alliance between the Offeror Related Parties and the Target by theTransactions (this provision shall be effective on the closing date (meaning the date when the voting
rights ratio of MC and the Offeror in the Target becomes 50.00%, respectively, after the Share
Consolidation becomes effective; hereinafter the same)113

(iii) Details of the business alliance・ In general, the implementation of a business alliance in the following alliance fields (the “Business
Alliance”), the contribution and cooperation to the promotion of the following various measures(this provision shall be effective as of the closing date), and establishment of the collaborationcommittee as a forum for consultation on the policy and progress of the Business Alliance(A) Real store-related: Creation of new store forms in real stores, the strengths of the Target andthe Offeror, and that can provide new services utilizing each company’s functions and products(B) Digital collaboration-related: Link member information held by each group of the Offeror
Related Parties and the Target and expand the customers who use services of the Target Groupby utilizing the customer database and make them loyal customers(C) Green collaboration-related: Decarbonization of the Target Group and promotion of thecircular economy business utilizing the business foundations of the Offeror Related Parties andtheir groups(D) Business alliances in other areas: Cooperation with measures in other areas that aim to
maximize the corporate value of the Target Group determined by the collaboration committee
after consultation between the Offeror Related Parties and the Target
・ (A) Provision of sufficient management resources by the Offeror Related Parties and their groups
to the Target Group within the scope of economic rationality, and (B) consultation and considerationof details of implementation of the Business Alliance and roles of each party based on the provisionof sufficient management resources by the Target Group to the Offeror Related Parties and theirgroups within the scope of economic rationality (this provision shall be effective as of the closing
date)・ Agreement by the collaboration committee on the details of implementation of the Business
Alliance and specific roles of each party based on the results of the above consultation andconsideration within 12 months from the execution date of the Capital and Business AllianceAgreement (this provision shall be effective as of the closing date)・ Implementation of measures agreed upon by the collaboration committee (the relevant measuresand the roles of each party shall be reviewed every three years from the time of the above
agreement) within three years from the closing date in principle (this provision shall be effective asof the closing date)(iv) Management of the Target, etc.
・ Confirmation by the Offeror Related Parties of the Target Group’ officers and employees
strengthening the Target’s existing businesses and developing new businesses to maximize Target’s
corporate value, and operating with the aim of “improving Life Time Value of consumers” and “aprosperous local community in Japan” through the Business Alliance (this provision will beeffective as of the closing date)・ The Offeror Related Parties’ utmost respect for the Target Group’s contractual and business
relationships existing prior to the closing date (including contractual terms and conditions agreed
to with franchisee owners) to the extent that such relationships contribute to enhancing the Target
Group’s corporate value, and in the commercially reasonable scope of the Target’s transaction
practices existing before the closing date114

・ The Offeror Related Parties’ obligation to maintain the employment of the Target Group employees
and to maintain the employment terms and conditions of the employees not to be substantially lessthan the level as of the execution date of the Capital and Business Alliance Agreement (the Offeror
Related Parties’ obligation does not extend to retirement or disciplinary actions in accordance withlaws and regulations and internal rules, the case where the Target Group needs to change the terms
and conditions of employment of the Target Group’s employees in order to maintain substantiallythe same business operation as before in line with changes in the market situation or the businessenvironment, or any other case that follows prior established practice of the Target Group) ( thisprovision will be effective as of the closing date)・ Sincere consultation about the stock option system of the Target that exists as of the execution dateof the Capital and Business Alliance Agreement
・ Target’s obligation to make requests to each shareholding association to the extent commerciallyreasonable to require all of the Target Shares owned by each shareholding association of the Target
Group to take measures to legally subscribe to the Tender Offer and to take measures required tocomply with laws and regulations applicable to Tender Offer
・ Dispatch or secondment of the officers and employees of Offeror Related Parties and their groups
to the Target Group as required for the purpose of effectively and substantially promoting theBusiness Alliance (this provision shall be effective as of the closing date)2.
(1)

Summary of Tender Offer
Summary of Target
(I)
Name
(II)
Address(III)
Title/name ofrepresentative(IV)
Details of
business(V)
Stated capital(VI)
Date ofestablishment
(VII)
Major
shareholders
andshareholding
ratio(as ofAugust 31,2023) (Note)

Lawson, Inc.
Osaki 1-11-2, Shinagawa-ku, Tokyo
President and CEO, Representative Director, Chairman of the Board
Sadanobu Takemasu
Development of franchise chains of “Lawson” convenience stores
58,506 million yen (as of November 30, 2023)
April 15, 1975
Mitsubishi Corporation
The Master Trust Bank ofJapan, Ltd. (trust account)
Custody Bank of Japan,
Ltd. (trust account)
SMBC Nikko Securities
Inc.

50.11%
8.15%
2.74%
2.31%

KDDI Corporation

2.11%

NTT DOCOMO, INC.

2.09%

Japan Securities FinanceCo., Ltd.

1.73%

115

(Note)

JPMorgan
Securities
1.20%
Japan Co., Ltd.
Mitsubishi UFJ Morgan
Stanley Securities Co.,
1.20%
Ltd.
STATE STREET BANK
AND
TRUST
COMPANY
505103(standingproxy:
0.93%
Settlement & Clearing
Services
Department,
Mizuho Bank, Ltd.)(VIII) Relationship between Offeror and Target
Capital
As of today, the Offeror holds 2,110,000 Target Shares (Shareholding
relationship
Ratio: 2.11%).
Personnel
Not applicable.
relationship
The Offeror has executed the Capital and Business Alliance Agreement
Business
with the Target. In addition, the Offeror has executed the business
relationshipalliance agreement with the Target, MC, and menu, Inc.
Applicablestatus of
The Offeror does not fall under a related party.
related parties“(VII) Major shareholders and shareholding ratio (as of August 31, 2023)” is quoted from “status ofmajor shareholders” in the second Quarterly Report for the 49th fiscal year submitted by the Target
on October 13, 2023.

(2)
Schedule(I)
Schedule
Decision date

Date of public notice of commencementof the Tender Offer

Date of submission of the Tender Offer
Statement

March 27, 2024 (Wed.)
March 28, 2024 (Thu.)
An electronic public notice shall be made and astatement to that effect shall be published in the Nihon
Keizai Shimbun.
(Electronic Public Notice Address
https://disclosure2.edinet-fsa.go.jp/)
March 28, 2024 (Thu.)(II) Period for Purchase, etc. in the Statement
From March 28, 2024 (Thursday) to April 25, 2024 (Thursday) (21 business days)

116

(III) Possibility of extension on request of the Target
Subject to the provisions of Article 27-10, paragraph 3 of the Act, the Tender Offer Period will be
extended to 30 business days, i.e., until May 13, 2024 (Monday) when the Target submits an opinion
report requesting an extension of the Tender Offer Period.
(3)

Price of tender offer(I) 10,360 yen per common share(II) Share options
1 yen per share option issued pursuant to the resolution of the Target’s board of directors meeting heldon March 25, 2015 (the “14th Series of Share Options”) (the exercise period is from April 10, 2015 toMarch 24, 2035)
1 yen per share option issued pursuant to the resolution of the Target’s board of directors meeting heldon April 13, 2016 (the “16th Series of Share Options”) (the exercise period is from May 2, 2016 toApril 13, 2036)
1 yen per share option issued pursuant to the resolution of the Target’s board of directors meeting heldon April 12, 2017 (the “17th Series of Share Options”) (the exercise period is from May 1, 2017 toApril 11, 2037)
1 yen per share option issued pursuant to the resolution of the Target’s board of directors meeting heldon July 5, 2017 (the “18th Series of Share Options”) (the exercise period is from July 21, 2017 to July 4,2037)
1 yen per share option issued pursuant to the resolution of the Target’s board of directors meeting heldon May 22, 2018 (the “19th Series of Share Options”) (the exercise period is from June 8, 2018 to
May 21, 2038)
1 yen per share option issued pursuant to the resolution of the Target’s board of directors meeting heldon May 21, 2019 (the “20th Series of Share Options”) (the exercise period is from June 7, 2019 to
May 20, 2039)
1 yen per share option issued pursuant to the resolution of the Target’s board of directors meeting heldon May 27, 2020 (the “21st Series of Share Options”) (the exercise period is from June 12, 2020 to
May 26, 2040)
1 yen per share option issued pursuant to the resolution of the Target’s board of directors meeting heldon May 25, 2021 (the “22nd Series of Share Options”) (the exercise period is from June 11, 2021 to
May 24, 2041)
1 yen per share option issued pursuant to the resolution of the Target’s board of directors meeting held117

on May 25, 2022 (the “23rd Series of Share Options”) (the exercise period is from June 10, 2022 to
May 24, 2042)
1 yen per share option issued pursuant to the resolution of the Target’s board of directors meeting heldon May 24, 2023 (the “24th Series of Share Options”) (the exercise period is from June 9, 2023 to
May 23, 2043)(The 14th Series of Share Options, 16th Series of Share Options, 17th Series of Share Options, 18th
Series of Share Options, 19th Series of Share Options, 20th Series of Share Options, 21st Series of Share
Options, 22nd Series of Share Options, 23rd Series of Share Options, and 24th Series of Share Options,collectively, the “Share Options”.)(III) Depositary receipts for share certificates
10,360 yen per share of the Target Shares related the American depositary sharers (the “American
Depositary Shares”) deposited with Citibank, N.A., and Deutsche Bank Trust Company Americas(collectively, the “Depositary Banks”) and represented by the American depositary receipts related to
the Target Shares issued by the Depositary Banks in the United States (the “American Depositary
Receipts”).
(Note) According to the notification for the American Depositary Receipts (Form F-6EF) submitted by
Citibank, N.A. as of February 13, 2018 to the U.S. Securities and Exchange Commission (the“SEC”) and the one submitted by Deutsche Bank Trust Company Americas as of April 2, 2018
to the SEC (collectively, the “American Depositary Receipts Notifications”), the American
Depositary Receipts for the Target Shares were issued in the United States. However,according to the Target, the Target was not involved in the issuance of these American Depositary
Receipts. Since the Offeror aims to acquire all of the Target Shares in the Tender Offer(excluding the Target Shares held by the Offeror Related Parties and treasury shares held by theTarget), the Offeror, in accordance with Article 27-2, paragraph (5) of the Act and Article 8,paragraph (5), item (iii) of the Order for Enforcement of the Financial Instruments and Exchange
Act (Cabinet Order No. 321 of 1965, as amended; the “Order”), includes the American
Depositary Receipts as the type of share certificates, etc., to be purchased, because it is necessary
to solicit applications for sales, etc., for all the share certificates, etc. issued by the Target. On
the other hand, while the American Depositary Receipts are securities issued in the United States,
it has been determined that it will be difficult for the Offeror, which is a resident of Japan, toacquire the American Depositary Receipts themselves in the Tender Offer conducted outside theUnited States because there are no financial instruments business operators, etc., that can handle
the acquisition as a tender offer agent in practice. Accordingly, in the Tender Offer, the Offeror
will accept tenders of the Target Shares and the Share Options only, and instead of accepting
tenders of the American Depositary Receipts themselves, it will accept tenders of the Target
Shares related to such American Depositary Shares represented by the American Depositary
Receipts. Therefore, the owners of the American Depositary Receipts who wish to tender in
the Tender Offer should deliver the American Depositary Receipts to the Depositary Banks and118

receive the delivery of the Target Shares related to such American Depositary Shares represented
by the American Depositary Receipts, in advance.
(4)

Basis for calculation of the price of tender offer(I) Basis for calculation(i) Common shares
To ensure the fairness of the Tender Offer Price, the Offeror, in determining the Tender Offer Price for theTarget Shares, requested UBS Securities, its financial adviser, to calculate the value of the Target Shares as
its third-party valuation institution independent of the Offeror Related Parties and the Target. UBS
Securities is not a related party of the Offeror Related Parties or the Target and has no material interest in theTransactions including the Tender Offer.
After considering the valuation method that should be adopted among various share valuation methods
when assessing the share value of the Target, UBS Securities assess the share value of the Target using eachof (i) the average market price analysis because the Target Shares are listed on the Prime Market of the Tokyo
Stock Exchange, (ii) the comparable company analysis because there is a listed company comparable to theTarget and it is possible to infer by analogy the share value of the Target by comparing the Target with sucha comparable company, and (iii) the DCF analysis so as to reflect future business activities in the valuation,subject to the condition precedent set forth below (Note) and certain other conditions, based on the premisethat the Target is a going concern and from the perspective that it would be appropriate to assess the sharevalue of the Target in multiple ways. As of February 5, 2024, the Offeror received the share valuation
report from UBS Securities (the “Share Valuation Report (UBS Securities)”).
According to UBS Securities, the ranges of the per share value of the Target Shares calculated using eachof the above methods are as follows. For the conditions precedent and considerations related to the
preparation of the Share Valuation Report (UBS Securities) and the valuation analysis that serve as a basis
therefor, please refer to the below (Note).
Average market price analysis: 7,264 yen to 8,721 yen
Comparable company analysis: 6,568 yen to 8,835 yen
DCF analysis:
9,711 yen to 13,038 yen
Under the average market price analysis, February 5, 2023 was used as the valuation base date, and theper share value of the Target Shares was calculated to range from 7,264 yen to 8,721 yen, based on theclosing price of the Target Shares listed on the Prime Market of the Tokyo Stock Exchange on the valuationbase date of 8,721 yen and the simple average of closing prices over the prior one month of 8,154 yen, overthe prior three months of 7,545 yen, and the simple average of closing prices over the prior six months of
7,264 yen.
Under the comparable company analysis, the share value of the Target was calculated throughcomparison with trading prices and financial indices indicating profitability, etc. of listed companies engaged
in businesses considered to be relatively similar to those of the Target. The per share value of the Target
Shares was calculated to range from 6,568 yen to 8,835 yen.
Under the DCF analysis, the per share value of the Target Shares was calculated to range from 9,711 yen
to 13,038 yen, as a result of analyzing the enterprise value and the equity value of the Target by discounting

119the free cash flow that is expected to be generated by the Target in the future using a certain discount rate,
based on the earnings forecast of the Target in and after the fiscal year ending February 2024 which takes
into consideration various factors including the Target’s business plan confirmed by the Offeror for five years
from the fiscal year ending February 2024 to the fiscal year ending February 2028, the trend of the Target’s
business performance, and publicly available information. The Target’s business plan, which served as abasis for the DCF analysis, does not include any fiscal year in which a substantial increase/decrease in profit
is expected. Further, the business plan does not assume the implementation of the Transactions, and does notinclude the synergies expected to be realized from the implementation of the Transactions being completed
because it was difficult to specifically estimate such synergies at the time of the calculation.
(Note) The Share Valuation Report (UBS Securities) has been delivered solely for the Offeror to
examine the Tender Offer Price of the Target Shares from a financial point of view. UBS did notconduct any valuation analysis of the Share Options. The Share Valuation Report (UBS
Securities) does not express any opinion or view on the following: (a) the terms of, or otheraspects of, the Transaction (including, without limitation, the manner or structure of theTransaction or other elements) or (b) the relative advantage of the Transaction compared withother strategies or transactions that may be adopted or implemented by the Offeror, or businessdecision-making related to promoting or implementing the Transaction. Furthermore, theShare Valuation Report (UBS Securities) does not make any recommendations to the Offeror
and the Board of the Directors of the Offeror on any particular purchase price or any
recommendations that any particular purchase price is the only appropriate purchase prices.
UBS Securities also does not express any opinion or view on the fairness (whether financial orotherwise), as compared with the Tender Offer Price, of the amount, nature, or other aspects ofany remuneration for officers, directors, or employees of any party to the Transaction. The
Share Valuation Report (UBS Securities) does not express any opinion on the price at which theTarget Shares should be transacted at any time, including after the Transaction is publicly
announced or commences.
In preparing the Share Valuation Report (UBS Securities), UBS Securities has assumed andrelied upon the accuracy and completeness of the assumptions and information that were
publicly available or were furnished to UBS Securities by the Offeror or the Target or their otheradvisors or were otherwise reviewed by UBS Securities for the purposes of preparing the Share
Valuation Report (UBS Securities). The content of the assumptions and information has notbeen independently verified by UBS Securities or any of its directors, officers, employees,
agents, representatives and/or, advisers, or any other person.
No representation, warranty, or undertaking, express or implied, is or will be given by UBS
Securities or its directors, officers, employees, agents, representatives, or advisors in relation to
the accuracy, completeness, reliability, or sufficiency of the information contained in the Share
Valuation Report (UBS Securities) or the reasonableness of any assumption contained in the
Share Valuation Report (UBS Securities).
The Share Valuation Report (UBS Securities) is provided solely for the benefit of the Offeror,
and the Offeror’s shareholders and other persons should not rely upon the Share Valuation Report120

(UBS Securities) and will not be conferred any interests, rights, or remedies by the Share
Valuation Report (UBS Securities).
By receiving the Share Valuation Report (UBS Securities), the Offeror acknowledges andagrees that to the maximum extent permitted by law, except in the case of fraud and save as
provided in the engagement letter, UBS Securities and its directors, officers, employees, agents,
representatives and advisors expressly disclaim any liability which may arise from the Share
Valuation Report (UBS Securities), or any other written or oral information provided inconnection with the Share Valuation Report (UBS Securities), and any errors contained thereinor omissions therefrom.
The Share Valuation Report (UBS Securities) may also contain forward-looking statements,
projections, estimates, forecasts, targets, and/or opinions (collectively, the “Forecasts”) provided
to UBS Securities by the Offeror or the Target, and UBS Securities has relied upon the opinionof the Offeror as to the reasonableness and achievability of the Forecasts (and the assumptions
and bases thereof). UBS Securities has assumed that the Forecasts represent the best available
assessments and judgments of the Offeror and the Target as of the date of the Share Valuation
Report (UBS Securities) and that the Forecasts will be realized in the amounts and time periods
contemplated by the Offeror and the Target. All assumptions contained in the Share Valuation
Report (UBS Securities) have been discussed and agreed with the Offeror. The Forecasts
involve significant assumptions and subjective judgments which may or may not prove to becorrect, and there can be no assurance that any Forecasts are a reliable indicator of future
performance, nor that they are attainable or will be realized. No representation or warranty isgiven as to the achievement or reasonableness of, and no reliance should be placed on, any
Forecasts contained in the Share Valuation Report (UBS Securities). The Share Valuation
Report (UBS Securities) was prepared based on the economic, regulatory, market, and otherconditions as in effect on the date thereof and the information made available to UBS Securities
as of the same date. Subsequent changes in these conditions may affect the information
contained in the Share Valuation Report (UBS Securities). The Share Valuation Report (UBS
Securities) speaks as at the date thereof (unless an earlier date is otherwise indicated therein), andin furnishing the Share Valuation Report (UBS Securities), no obligation is undertaken, nor is
any representation or undertaking given, by any person: (i) to provide the Offeror with any
additional information, (ii) to update, revise, or re-affirm any information in the Share Valuation
Report (UBS Securities), including any Forecasts, or (iii) to correct any inaccuracies therein
which may become apparent.
The analyses conducted by UBS Securities described in the Share Valuation Report (UBS
Securities) are summaries of the material financial analyses presented by UBS Securities to theOfferor in connection with the Share Valuation Report (UBS Securities) and are notcomprehensive descriptions of all analyses undertaken or information referred to by UBS
Securities in connection with the Share Valuation Report (UBS Securities). The preparation of
the Share Valuation Report (UBS Securities) and its underlying analysis are a complex analyticalprocess involving various judgments about the appropriateness and relevance of methods offinancial analysis and the application of those methods to the particular circumstances; therefore,a part or summary of the analysis results do not necessarily accurately present all aspects of the121analyses. UBS Securities’ analysis results must be considered holistically, and reference to apart or summary thereof, without considering all of such analysis results as a whole, may giverise to failure to obtain a correct understanding of the processes underlying UBS Securities’
analyses. None of the companies reviewed in UBS Securities’ analyses as a comparable
company is identical to any business units or subsidiaries of the Target, and these companies
were selected because they were publicly traded companies with businesses that, for purposes of
UBS Securities’ analyses, could be considered similar to those of the Target. The analyses
made by UBS Securities necessarily involve complex considerations and judgments concerning
differences in financial and business characteristics of the companies reviewed for comparison
with the Target and other factors that could affect these companies.
In preparing the Share Valuation Report (UBS Securities), UBS Securities has: (i) not madeany independent valuation or appraisal of the physical assets and liabilities of the Target or any
other company referred to in the Share Valuation Report (UBS Securities), nor been furnishedwith any such valuation or appraisal; (ii) not carried out any assessment as to the commercial
merits of the Transaction; (iii) not conducted any legal, tax, accounting, or other analysis inrespect of the Transaction, and where relevant, has relied solely upon the judgments of therelevant professional advisors in these areas; and (iv) assumed that in the course of obtaining any
regulatory or third party approvals, consents, and releases for the Transaction, no delay,
limitation, restriction, or condition would be imposed that would have an adverse effect on theTarget, any other company referred to in the Share Valuation Report (UBS Securities), or theTransaction.
UBS Securities is acting as financial advisor of the Offeror in connection with the Transaction
and receives remuneration for its services as financial advisor, and such remuneration t becomespayable subject to the successful completion of the Transaction. In addition, the Offeror has
agreed to indemnify UBS Securities for all costs borne by UBS Securities in relation to UBS
Securities’ involvement and certain liabilities arising out of UBS Securities’ engagement.
The Offeror comprehensively considered elements such as the valuation results of the Share Valuation
Report (UBS Securities) obtained on February 5, 2024 from UBS Securities, the results of due diligence
conducted on the Target during the period from mid-October 2023 to late-January 2024, the approval ordisapproval of the Tender Offer by the Target’s board of directors, the trends in market price of the Target
Shares, and prospects for tendering in the Tender Offer, and took into account the results of consultations
and negotiations with the Target, and decided to set the Tender Offer Price at 10,360 yen per share as ofFebruary 6, 2024.
The Tender Offer Price of 10,360 yen per share of the Target Shares represents a price obtained by adding
a premium of 18.79% to the closing price of 8,721 yen of the Target Shares in the Prime Market of the TSE
on February 5, 2024, the business day prior to the date of the announcement of the scheduled commencementof the Tender Offer, premium of 27.05% to the simple average of closing prices for the last one month until
the same date (8,154 yen), premium of 37.31% to the simple average of closing prices for the last threemonths until the same date (7,545 yen), or premium of 42.62% to the simple average of closing prices forthe last six months until the same date (7,264 yen), respectively.

122

In addition, the Tender Offer Price per Target Share, 10,360 yen, exceeds the upper limit of the valuation
result range, based on the average market price analysis and the comparable companies analysis in the Share
Valuation Report (UBS Securities), and is within the valuation result range based on the DCF analysis.
(ii)Share Options
The Share Options were granted to directors and executive officers of the Target as executive
compensation equivalent to retirement benefits. The holder of the Share Options may exercise suchholder’s Share Options only in a lump sum, within the exercise period of the Share Options, which is limited
to the 10-day period (or the following business day, if the 10th day falls on a holiday) from the date following
the date on which such holder has lost his/her/their position as the Target’s director or executive officer.
Considering the fact that the Offeror may not exercise the Share Options even if the Offeror acquires them,
the Offeror set the Share Option Price at 1 yen. Since the Offeror set the Share Option Price as describedabove, the Offeror has not obtained a valuation report from a third-party valuator.
(iii)
American Depositary Receipts
The American Depositary Receipts represent the American Depositary Shares deposited with Depositary
Banks, and one American Depositary Share is equivalent to one-fourth of a Target Share. Since, in theTender Offer, tenders of the American Depositary Receipts themselves will not be accepted, and instead,tenders of the Target Shares relating to the American Depositary Shares represented by the American
Depositary Receipts will be accepted, as to the price of the tender offer for the American Depositary Receipts,
the price per Target Share for the Target Shares to be received by delivering the American Depositary Sharesto the Depositary Bank has been set at 10,360 yen per share, which is the same price as the Tender Offer
Price.
(II) Background of calculation(Background leading to the decision of the Tender Offer Price)
As described in “(I) Background, purposes and decision-making process leading to the decision to conduct
the Tender Offer” under “(2) Background, purpose and decision-making process leading to the decision to
conduct the Tender Offer, and management policy following the Tender Offer” in “1. Purposes of Tender
Offer,” the Offeror, in late June 2023, appointed Nishimura & Asahi (Gaikokuho Kyodo Jigyo) as its legal
advisor independent of the Offeror Related Parties and the Target, and in early September 2023, appointed
UBS Securities as its financial adviser independent of the Offeror Related Parties and the Target, and it
commenced specifically considering the Transactions (Initial Proposal). On September 1, 2023, theOfferor, together with MC and the Initial Partner Candidate, submitted a written initial proposal regarding
the Transactions (Initial Proposal) to the Target, and made a proposal to the Target to take the Target Shares
private with only the Offeror Related Parties and the Initial Partner Candidate as the Target’s shareholders.
Since mid-September 2023, the Offeror Related Parties and the Initial Partner Candidate have commenced
consultations on specific matters with the Target toward the implementation of the Transactions (Initial
Proposal). In addition, since mid-October 2023, the Offeror Related Parties and the Initial Partner
Candidate have consecutively commenced due diligence on the Target.
After the Initial Partner Candidate provided the Target with official notice as of December 25, 2023,
declining the proposal regarding the Transactions (Initial Proposal), as a result of the consultations, the123Offeror Related Parties provided the Target with a written proposal on December 26, 2023, amending theinitial proposal to change the Transactions (Initial Proposal) from a collaboration involving the privatizationof the Target Shares by three companies (i.e., the Offeror Related Parties and the Initial Partner Candidate)to a collaboration involving the privatization of the Target Shares by two companies (i.e., the Offeror Related
Parties). Thereafter, the Offeror Related Parties and the Target continued to consider the Transactions.
In addition, based on the results of due diligence on the Target conducted from mid-October 2023 to late
January 2024, with respect to the Tender Offer Price, the Offeror made the Initial Proposal in writing to theTarget on December 26, 2023, setting the Tender Offer Price per Target Share at 8,650 yen, the Share Option
Price at 1 yen, and the Tender Offer Price per Target Share relating to American Depositary Shares,
represented by American Depositary Receipts, at 8,650 yen. In response to the Initial Proposal, the Offeror
received a request from the Target on December 27, 2023 to consider revising the Tender Offer Price,considering the interests of the Target’s minority shareholders.
In response to that request, the Offeror made Proposal No. 2 in writing to the Target on January 4, 2024,
setting the Tender Offer Price per Target Share at 9,000 yen, the Share Option Price at 1 yen, and the Tender
Offer Price per Target Share relating to American Depositary Shares, represented by American Depositary
Receipts, at 9,000 yen. In response to Proposal No. 2, the Offeror received a request from the Target on
January 6, 2024 to once again consider revising the Tender Offer Price, considering the interests of theTarget’s minority shareholders.
In response to that request, the Offeror made Proposal No. 3 in writing to the Target on January 11, 2024,
setting the Tender Offer Price per Target Share at 9,500 yen, the Share Option Price at 1 yen, and the Tender
Offer Price per Target Share relating to American Depositary Shares, represented by American Depositary
Receipts, at 9,500 yen. In response to Proposal No. 3, the Offeror received a request from the Target on
January 12, 2024, to once again consider revising the Tender Offer Price, considering the interests of theTarget’s minority shareholders.
In response to that request from the Target, the Offeror made Proposal No. 4 in writing to the Target on
January 18, 2024, setting the Tender Offer Price per Target Share at 10,000 yen, the Share Option Price at
1 yen, and the Tender Offer Price per Target Share relating to American Depositary Shares, represented byAmerican Depositary Receipts, at 10,000 yen. In response to Proposal No. 4, the Offeror received a requestfrom the Target on January 24, 2024 to consider further raising the Tender Offer Price, considering theinterests of the Target’s minority shareholders and in light of the recent growth in the Target’s business results,
including the details of the Target’s Financial Results and the continued rise in the current stock price, for an
opinion in favor of, and recommendation to tender in, the Transactions.
In response to that request from the Target, the Offeror made Proposal No. 5 in writing to the Target on
January 26, 2024, setting the Tender Offer Price per Target Share at 10,200 yen, the Share Option Price at
1 yen, and the Tender Offer Price per Target Share relating to American Depositary Shares, represented byAmerican Depositary Receipts, at 10,200 yen. In response to Proposal No. 5, the Offeror received a requestfrom the Target on January 28, 2024, to consider further raising the Tender Offer Price, considering theinterests of the Target’s minority shareholders, for an opinion in favor of, and recommendation to tender in,
the Transactions.
In response to that request from the Target, the Offeror made Proposal No. 6 in writing to the Target on
January 29, 2024, setting the Tender Offer Price per Target Share at 10,290 yen, the Share Option Price at
1 yen, and the Tender Offer Price per Target Share relating to American Depositary Shares, represented by

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American Depositary Receipts, at 10,290 yen. In response to Proposal No. 6, the Offeror received a requestfrom the Target on January 29, 2024, to consider further raising the Tender Offer Price, with the aim of fully
securing the interests of the Target’s minority shareholders, and for an opinion in favor of, andrecommendation to tender in, the Transactions.
In response to that request from the Target, the Offeror made Proposal No. 7 in writing to the Target on
January 30, 2024 setting the Tender Offer Price per Target Share at 10,350 yen, setting the Share Option Priceat 1 yen, and setting the Tender Offer Price per Target Share relating to American Depositary Shares
represented by American Depositary Receipts at 10,350 yen. In response to Proposal No. 7, on January 31,
2024, the Offeror received a request from the Target that the Offeror will consider further raising the Tender
Offer Price for the opinion in favor of, and recommendation to tender in, the Transactions from theperspective of fully securing the interests of the Target’s minority shareholders.
In response to that request from the Target, the Offeror made the Final Proposal in writing to the Target on
January 31, 2024 setting the Tender Offer Price per Target Share at 10,360 yen, setting the Share Option Priceat 1 yen, and setting the Tender Offer Price per Target Share relating to American Depositary Shares
represented by American Depositary Receipts at 10,360 yen. In response to the Final Proposal, on
February 2, 2024, the Offeror received a response from the Target stating that it views the Tender Offer Pricein the Final Proposal as the maximum price that the Offeror could offer and accepts the Tender Offer Pricein the Final Proposal.
As a consequence of the above, the Offeror and the Target agreed on February 2, 2024, to set the Tender
Offer Price per Target Share at 10.360 yen, the Share Option Price at 1 yen, and the Tender Offer Price per
Target Share relating to American Depositary Shares, represented by American Depositary Receipts, at
10,360 yen. The Offeror also agreed with MC on February 6, 2024 to set the Tender Offer Price per Target
Share at 10,360 yen, the Share Option Price at 1 yen, and the Tender Offer Price per Target Shares relating
to American Depositary Shares, represented by American Depositary Receipts, at 10,360 yen.
As stated in “(1) Outline of the Tender Offer” under “1. Purposes of Tender Offer” above, the Offeror has
confirmed that all of the Conditions Precedent have been satisfied; therefore, today, the Offeror decided tocommence the Tender Offer on March 28, 2024. With respect to the Tender Offer Price, the Tender Offer
Price per Target Share remains 10,360 yen, the Share Option Price remains 1 yen, and the Tender Offer Price
per Target Share relating to American Depositary Shares, represented by American Depositary Receipts,
remains 10,360 yen.
(Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender
Offer Price and measures to avoid conflicts of interest)
As described in “(3) Measures to ensure the fairness of the Tender Offer, such as measures to ensure thefairness of the Tender Offer Price and measures to avoid conflicts of interest” in “1. Purposes of Tender
Offer” above, considering the fact that the Target is a consolidated subsidiary of MC, which is one of theOfferor Related Parties, and therefore the Transactions including the Tender Offer and execution of theCapital and Business Alliance Agreement fall under the type of transaction involving the issue of structural
conflicts of interest and information asymmetry with minority shareholders, in the Transactions, including
the Tender Offer, and execution of the Capital and Business Alliance Agreement, the Offeror Related Parties
and the Target implemented the measures set forth in (i) to (x) below with a view to ensuring the fairness of
the Tender Offer from the time of the Tender Offer, eliminating arbitrariness in decision-making concerning

125the Transactions and execution of the Capital and Business Alliance Agreement, securing the fairness,transparency, and objectivity of the decision-making process, and avoiding any doubt of a conflict of interest.
The measures implemented by the Target described below are based on the explanation made by the Target.
(i) Receipt of a share valuation report from an independent third-party valuator retained by the Offeror
To ensure the fairness of the Tender Offer Price, the Offeror, in determining the Tender Offer Price,
requested UBS Securities as its financial adviser to be its third-party valuator independent of the Offeror
Related Parties and the Target to calculate the value of the Target Shares. UBS Securities is not a related
party of the Offeror Related Parties or a Target related party and has no material interest in the Transactions
including the Tender Offer. In addition, since the Offeror took each of the measures in (i) and (ii) to (x)below and determined the Tender Offer Price through consultation and negotiations with the Target, theOfferor has not obtained an opinion concerning the fairness of the Tender Offer Price (fairness opinion) fromUBS Securities. For details, please refer to “(I) Basis for calculation.”(ii)
Establishment of independent special committee at the Target and receipt of a written report fromthe special committee(A) Background of establishment
According to the Target, as described in “(II) Decision-making process leading to and grounds for theopinion in favor of the Tender Offer by the Target” under “(2) Background, purpose and decision-making
process leading to the decision to conduct the Tender Offer, and management policy following the Tender
Offer” in “1. Purposes of Tender Offer” above, the Target established the Special Committee by a resolution
at the Target’s board of directors meeting held on September 13, 2023. According to the Target, before theestablishment of the Special Committee, the Target, since early September 2023, with the advice from
Anderson Mori & Tomotsune, for the purpose of establishing a system to review, negotiate, and makedecisions concerning the Transactions from the perspective of enhancing the Target’s corporate value andprotecting the interests of minority shareholders of the Target from a standpoint independent of the Offeror
Related Parties, explained to all of the independent outside directors and independent outside auditors of theTarget who have no material interest in relation to the Offeror Related Parties and the Transactions, that theTarget received the initial proposal regarding the Transactions (Initial Proposal), and that, in reviewing andnegotiating the Transactions, it is necessary to take sufficient measures to ensure the fairness of the terms
and conditions of the Transactions, including the establishment of a special committee, because theTransactions fall under the type of transaction involving the issue of structural conflicts of interest andinformation asymmetry with minority shareholders. According to the Target, at the same time, the Target
considered candidates for the members of the Special Committee with the advice from Anderson Mori &Tomotsune. According to the Target, after confirming that the candidates for the members of the Special
Committee were independent of the Offeror Related Parties, and that they had no material interest different
from those of the minority shareholders regarding the success or failure of the Transactions, the Target held
discussions with the Target’s independent outside directors and independent outside audit & supervisoryboard members above, and with the advice from Anderson Mori & Tomotsune, selected three persons, Ms.
Miki Iwamura, Ms. Satoko Suzuki, and Ms. Yuko Gomi, as the candidates for the members of the Special
Committee for the purpose of the Special Committee being at an appropriate scale while securing a balance126

of knowledge, experience, and skills of the Special Committee as a whole (The members of the Special
Committee have not changed since its establishment. As for the remuneration of the members of theSpecial Committee, a fixed amount of remuneration is paid as consideration for their duties, regardless ofthe content of the report, and no contingency fee has been adopted.).
Accordingly, according to the Target, as described in “(II) Decision-making process leading to andgrounds for the opinion in favor of the Tender Offer by the Target” under “(2) Background, purpose anddecision-making process leading to the decision to conduct the Tender Offer, and management policy
following the Tender Offer” in “1. Purposes of Tender Offer” above, the Target established the Special
Committee by a resolution at the Target’s board of directors meeting held on September 13, 2023, andconsulted the Special Committee on the Consultation Matters.
In establishing the Special Committee, according to the Target, the Target’s board of directors resolvedthat (a) the Special Committee may obtain advice from the Target’s advisor concerning the Transactions in
considering the Consultation Matters and may entrust the Target’s share valuation, provision of the Fairness
Opinion concerning the Transactions, and other matters deemed necessary by the Special Committee to athird-party organization and the like, and the reasonable cost for such entrustment in such case will be borneby the Target; (b) the Target’s board of directors will conduct its decision making regarding the Transactions
with the utmost respect for the details of the Special Committee’s judgment and if the Special Committee
determines that the terms and conditions of the Transactions are not appropriate, the Target’s board of
directors will support the Transactions; (c) in order to ensure that an appropriate decision will be made, theauthority to request the Target’s directors, employees, and other persons deemed necessary by the Special
Committee to attend the Special Committee meetings and give an explanation for necessary information will
be given to the Special Committee; and (d) the authority to be substantially involved in the negotiation
process regarding the terms and conditions of the Transactions by confirming the policy of negotiations by
the Target regarding the terms and conditions of the Transactions in advance, receiving a timely report of its
circumstances, expressing an opinion, giving instructions, or making requests, as well as conduct direct
negotiations by itself when necessary, will be granted to the Special Committee.
According to the Target, at the Target’s board of directors meeting above, among the five directors of theTarget, the above resolution was unanimously passed after discussion by three directors of the Target,
excluding two directors, Mr. Masayuki Itonaga and Mr. Kiyotaka Kikuchi (that is, Mr. Sadanobu Takemasu,
Ms. Miki Iwamura, and Ms. Satoko Suzuki). At the Target’s board of directors meeting above, all of thefive statutory auditors expressed their opinion that they have no objection to the above resolution. In lightof the fact that on and before April 1, 2022, Mr. Masayuki Itonaga concurrently held the position of director
at Mitsubishi Corporation Financial & Management Services (Japan) Ltd., MC’s subsidiary, and Mr.
Kiyotaka Kikuchi concurrently holds the position of managing executive officer at MC, in order to eliminate,
as much as possible, possible impact of the issues of structural conflicts of interest and information
asymmetry with minority shareholders through the Transactions, they did not participate in the board of
directors meeting above and refrained from expressing their opinion. On the other hand, although Mr.
Sadanobu Takemasu previously worked at MC, more than nine years has passed since he was transferredfrom MC to the Target and is not in a position to receive instructions from the Offeror Related Parties, andthe side of the Offeror Related Parties has never been involved in the Transactions and is not in a position to
be involved therein. Therefore, since it has been determined that the Target’s decision-making in the127Transactions has no risk of a conflict of interest, he has participated in the discussions and resolutions at theTarget’s board of directors meeting above.
(B) Background of consideration
According to the Target, the Special Committee held a total of 22 meetings (total meeting time of overapproximately 22 hours) from September 13, 2023 until February 5, 2024, and performed its duties regarding
the Consultation Matters through such means as reporting, information sharing, consideration, and decision
making.
According to the Target, the Special Committee confirmed that SMBC Nikko Securities, the financial
advisor and third-party valuator of the Target, was independent and professionally qualified, and approved
the appointment thereof. The Special Committee also confirmed that Anderson Mori & Tomotsune, thelegal advisor of the Target, does not constitute an Offeror Related Party or a Target related party and had nomaterial interest in the Transactions, including the Tender Offer, and approved the appointment thereof. In
addition, the Special Committee confirmed that Daiwa Securities, the financial advisor and third-party
valuator of the Special Committee, was independent and professionally qualified, and appointed Daiwa
Securities. The Special Committee also confirmed that Nakamura, Tsunoda & Matsumoto, the legal
advisor of the Special Committee, does not constitute an Offeror Related Party or a Target related party andhad no material interest in the Transactions, including the Tender Offer, and appointed Nakamura, Tsunoda& Matsumoto. Furthermore, as described in “(vii) Establishment of independent review system at theTarget” below, the Special Committee confirmed that the internal review system for the Transactions
established by the Target (including the scope of officers and employees of the Target who will be involvedin the review, negotiation, and judgment for the Transactions and their duties) is independent and fair.
According to the Target, based on the above, the Special Committee is considering the measures to betaken to ensure the fairness of the procedures for the Transactions based on the opinions obtained fromNakamura, Tsunoda & Matsumoto. Further, while taking into account the advice obtained from Daiwa
Securities, the Special Committee received explanations from the Target on the Business Plan prepared by
the Target regarding the details, important preconditions, and the background of preparation, and confirmed
the reasonableness of these matters and approved the same.
According to the Target, the Special Committee received explanations from the Target on the purpose andsignificance of the Transactions as well as the expected impact on the business of the Target, and held aquestion-and-answer session on the foregoing. The Special Committee also presented questions to theOfferor Related Parties and held a question-and-answer session in the form of interviews with the Offeror
Related Parties on the purpose and background of the Transactions and the management policy following
the Transactions.
Furthermore, as described in “(iii) Receipt of a share valuation report and the Fairness Opinion from an
independent third-party valuator retained by the Special Committee” below, Daiwa Securities calculated thevalue of the Target Shares based on the Business Plan. According to the Target, the Special Committee
received explanations regarding the method of calculation used by Daiwa Securities for the calculation of
the value of the Target Shares, the reasons for adopting such method of calculation, the details of thecalculations by each method of calculation, and important conditions precedent, and confirmed thereasonableness of these matters after Q&A sessions, discussions and considerations.

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Further, according to the Target, the Special Committee also received reports from the Target and SMBC
Nikko Securities on the Target’s negotiations with the Offeror from time to time and discussed and reviewed
the same, and expressed necessary opinions on the Target’s negotiation policies as appropriate.
Specifically, the Special Committee received reports on the proposals of the Tender Offer Price from theOfferor upon receipt and after obtaining analysis and opinions from SMBC Nikko Securities and Daiwa
Securities regarding the response policies and the policy for the negotiation with the Offeror, consideredthese proposals based on the advice from Daiwa Securities from a financial perspective. Then, the Special
Committee expressed its opinions to the Target on the matters to be discussed with the Offeror in order toachieve the significance and purpose of the Transactions as the Target, and participated in the overall processof discussion and negotiation between the Target and the Offeror regarding the terms and conditions of theTransactions, including the Tender Offer Price. As a result, on January 31, 2024, the Target received aproposal from the Offeror that includes the Tender Offer Price of 10,360 yen per share, and as a result, theTarget received a total of eight proposals, resulting in a price increase of 19.77% from the initial priceproposal.
Furthermore, according to the Target, the Special Committee received explanations from Anderson Mori
& Tomotsune and Nakamura, Tsunoda & Matsumoto on the details of the draft of the Target Press Release
Dated February 6, 2024 concerning the Tender Offer to be announced or submitted by the Target on multiple
occasions and confirmed that appropriate information disclosure will be conducted.
(C) Details of decision
According to the Target, under the circumstances above, while taking into account the details of the legal
advice received from Nakamura, Tsunoda & Matsumoto, the advice received from Daiwa Securities, andthe Share Valuation Report (Daiwa Securities) and the Fairness Opinion received as of February 5, 2024,
after careful consultations and consideration on the Consultation Matters, the Special Committee, with theunanimous consent of all members, submitted to the Target’s board of directors on February 5, 2024 theWritten Report Dated February 5, 2024, the content of which is substantially as described below.
(a) Contents of the report by the Special Committee
1
2
3
4

The Transactions will contribute to the Target’s corporate value and the purposes of the Transactions
are appropriate and reasonable.
The fairness and appropriateness of the terms and conditions of the Transactions (including the tender
offer price in the Tender Offer) are ensured.
Due consideration is given in the Transactions to the interests of the Target’s shareholders through fair
procedures.
It is appropriate for the Target’s board of directors to express an opinion in favor of the Tender Offer
to recommend that the Target’s shareholders tender in the Tender Offer and to recommend that theowners of American Depositary Receipts deliver the American Depositary Receipts to the Depositary
Banks in advance and receive delivery of the Target Shares related to such American Depositary
Shares represented by those American Depositary Receipts to tender their shares in the Tender Offer
and that it would leave the decision as to whether to tender shares in the Tender Offer to the judgmentof the Share Option Holders.

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5

In addition to No.1 to No.4 above, the implementation of the Transactions is not considereddisadvantageous to the Target’s minority shareholders.

(b) Reasons for the decisions
1 Report on the Items for Consultation Matter (i) (whether the purposes of the Transactions areappropriate and reasonable (including whether the Transactions would contribute to the Target’s
corporate value))
Based on the following aspects, regarding the Items for Consultation Matter (i), the Transactions
would contribute to the Target’s corporate value and the purposes of the Transactions are appropriate
and reasonable.
(i) Synergies forecast by the Target
As synergies from the Transactions, the Target explained that the following points are expected to beachieved.
(I) Accelerate transformation into “Real × Tech Convenience” through the use of management
resources
・ The Target is seeking to take on the challenge of becoming the fastest global delivery
service business in the world (Quickest E Commerce service: QEC) by making the most ofTech and utilizing stores “real” shopping venues as EC centers.
・ Through the Transactions, the Target is expected to promote QEC that enables provision of
products to customers at the fastest speed in the convenience store industry and acceleratetransformation into “Real × Tech Convenience”, by strengthening its technologicalstructure, including the development of systems through the dispatch of engineers and otherhuman resources from the Offeror, and enhancing the Offeror’s customer base and thedigital marketing system that utilizes high-resolution location-based data unique to thetelecommunications company.
(II) Strengthen profitability by sharing customer base・ The Transactions will involve the utilization of the Offeror Group’s base of approximately
31 million customers and promotion of the high-resolution marketing measures.
・ Specifically, by reaching more consumers and attracting more customers through newcustomer referrals from the Offeror Group’s economic areas and referrals to individualstores by utilizing location information, creating new value in the application andmembership domains through development and provision of new services, providing a
one-stop response from the collection to the aggregation, analysis, and visualization of a
wealth of big data, and maximizing the value of data through promotion of thesemeasures, the Target will be able to consider promoting cross-selling and developing new
businesses and services, and Target’s marketing business are expected to expand.
(III) Coexistence with local communities by providing social infrastructure utilizing cuttingedge technologies
・ It can be expected that, by the Transactions, through the provision of services that support
various aspects of life, innovation into lifestyle experiences and behaviors associated withthe evolution of technology will be encouraged and social issues will be resolved.

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・ Specifically, for example, issues including the depopulation and aging of communities are
expected to be resolved by improving convenience for consumers in regions without
shops, through the use of the Offeror Group’s sophisticated drone technology.
・ In addition, by the use of the 5G network and satellite communications technology of theOfferor, development of stores and provision of products in augmented and virtual reality
linked to its own apps through metaverse services, including provision of medical services
such as remote diagnosis through health checks using vital sensing, are expected to beenabled.
(IV) Strengthen the business foundation by utilizing management resources such as advanced
human resources and know-how
・ By promoting human resource exchanges between the Offeror Group, the MC Group, andthe Target, and by providing mutual human resource support, including the secondment
and dispatch of employees, measures to address the normalization of labor shortages anddevelopment of human resources will also be enabled.
・ Strengthening the Target Group’s portfolio and maximizing the Group’s synergies can be
expected through the utilization of know-how of the financial business developed by theOfferor Group, collaboration in the entertainment field, and the ongoing sharing of the
MC Group’s global network.
(V) Strengthen cooperation in the environmental field to realize a decarbonized society
・ By implementing the Transactions, the Target’s green and sustainable initiatives toward
the achievement of the goal “Lawson Blue Challenge 2050!”, the environmental vision
formulated by the Target, will be strengthened and accelerated.
・ Specifically, for example, by utilizing the functions of the Offeror Group and the MCGroup, the use of renewable energy generated by solar panels, the purchase of foodproducts with reduced consumption prices near their expiration dates using vast location
data and purchasing data, and the replacement of plastic containers and PET bottlematerials with biomass materials will be promoted from now on.
(VI) Growth in the businesses of group companies
・ In the retail finance business area, the financial know-how of MC and the Offeror Group(including FinTech) will be combined.
・ In addition, functions related to MC and the Offeror Group’s content and digitaltechnology will accelerate the Target’s growth in the entertainment business area.
・ Furthermore, in the Target’s supermarket business and overseas business areas, smart
digital capabilities, and global expansion capabilities are essential, and forming alliances
between both companies can accelerate the growth of these businesses.
(VII) Reduction of listing maintenance costs and operational burden of the management divisionand reallocation of resources
・ By taking the Target Shares private through the Transactions, Target will be able to avoid
the human and economic costs associated with maintaining listing, which have been
pointed out in recent years, and to allocate resources to the various key initiatives
described above.

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(ii) Availability of alternative transactions
・ From the perspective of enhancing the Target’s corporate value, there are no specifictransactions that are viable alternatives to the Transactions.
(iii) Consistency between the Target’s explanation of the synergies and those of the Offeror Related
Parties.
・ In order to confirm whether there were any discrepancies in the understanding between theparties to the Transactions, the Special Committee asked the Offeror Related Parties almost thesame questions about the Transactions as it did to the Target.
・ As a result, not only there were no answers made by the Offeror Related Parties that
contradicted those of the Target, but also, there are no discrepancies between the Target’s
understanding concerning the assumptions of synergies expected from the Transactions andthose of the Offeror stated in the Target Press Release Dated February 6, 2024.
2

Report on the Items for Consultation Matter (iii) (whether due consideration is given in theTransactions to the interests of the Target’s shareholders through fair procedures)
Due to the following matters, due consideration is considered to have been given in the Transactions
to the interests of the Target’s shareholders through fair procedures.
(i) Establishment of a special committee
・ The Special Committee is considered to sufficiently ensure fairness, given the following
circumstances of its establishment and operation.
(I)
The Special Committee was established before the transaction terms were decided between
the Offeror and the Target.
(II) The Special Committee is composed solely of outside directors, who are considered highly
qualified under the “Fair M&A Guidelines - Enhancing Corporate Value and Securing
Shareholders’ Interests” issued by the Ministry of Economy, Trade and Industry as of June
28, 2019 (the “M&A Guidelines”), and outside auditors, who are considered to complement
the outside directors.
(III) The Target requests confirmation from the special committee in advance of, or promptly after,
discussing the Tender Offer Price with the Offeror, thereby ensuring that the Special
Committee can substantially influence the negotiation process regarding the transaction terms
by receiving timely reports on the status of negotiations and giving its opinions, instructions,and requests at important stages.
(IV) On September 13, 2023, after considering the independence, expertise, and track record ofseveral candidates for legal advisor, financial advisor, and third-party valuation institution,
the Special Committee retained Nakamura, Tsunoda & Matsumoto as its own legal advisor
independent of the Target and the Offeror Related Parties, and on the same day, Daiwa
Securities was appointed as an independent financial advisor and third-party appraiser
independent of the Offeror Related Parties and the Target, and has reviewed and madedecisions based on its expertise in the fairness of the procedures and the evaluation of
corporate value.
(V) Due to the diversity of the agreements contemplated for the Transactions and the synergies

132envisaged, it is difficult to publicly disclose all the details, but the Special Committee, on
behalf of the minority shareholders, obtained important information, including the draft of
the agreement to be executed by the Target regarding the Transactions, and examined andmade decisions based on such information.
(VI) The Target’s board of directors, in making a resolution on the matters for consultation with
the Special Committee, resolved that the Target’s board of directors should respect thedecisions of the Special Committee to the maximum extent possible in making its decisionon the Transactions, and in particular, if the Special Committee determines that the terms of
the Transactions are not appropriate, the Target’s board of directors shall not approve theTransactions with such terms and conditions.
(ii) Decision-making process of the Target
・ Upon the Target making the decision pertaining to the Transactions, three directors of theTarget, excluding Mr. Masayuki Itonaga and Mr. Kiyotaka Kikuchi, who are directors or
employees of MC, which is one of the Offeror Related Parties, or its subsidiary (that is, Mr.
Sadanobu Takemasu, Ms. Miki Iwamura, and Ms. Satoko Suzuki, who are members of theSpecial Committee) are expected to deliberate and pass resolutions.
・ Among the Target’s directors, Mr. Sadanobu Takemasu, President and CEO, previously
worked at MC. However, the M&A Guidelines set forth that if an independent special
committee is established and is functioning effectively, it is sufficient if the persons
concurrently holding positions as the Offeror’s director or employee are excluded. Given
that the period since Mr. Takemasu was transferred to the Target from MC is sufficiently long,and that Mr. Takemasu, as the President and CEO of the Target, has knowledge and experiencethat are indispensable and cannot be substituted in considering and negotiating theTransactions from the viewpoint of enhancing the corporate value of the Target, and also basedon the advice of Anderson Mori & Tomotsune, the Target’s legal advisor, and Nakamura,Tsunoda & Matsumoto, the Special Committee’s own legal advisor, it can be concluded that
there are no concerns from the perspective of independence and fairness with respect to Mr.
Takemasu’s participation in the consideration of the Transaction and negotiations with theOfferor.
・ Based on the information above, no circumstances were found that could raise suspicions
regarding the fairness of the decision-making process at the Target.
(iii) Receipt of advice from external advisors(I) Receipt of advice from a legal advisor
・ The Target’s board of directors received advice from the attorneys of Anderson Mori &Tomotsune, the Target’s legal advisor, regarding its decision-making, and it has been
determined that the Target has received independent legal advice from attorneys.
(II) Receipt of share valuation reports from a third-party valuator・ In order to ensure the fairness of the Tender Offer Price, the Target’s board of directors
obtained the Share Valuation Report (Nikko Securities) from SMBC Nikko Securities, an
independent third-party valuator, as materials concerning the value of the Target Shares.
・ In addition, multiple calculation methods were used in the Share Price Valuation Report(Nikko Securities) to avoid arbitrary calculation of the value of the Target Shares. In

133addition, there is no evidence of arbitrary actions by the directors and employees of theOfferor in the preparation of the Target’s business plan, which is the basis for suchcalculations, and there are no circumstances that raise doubts about the fairness of thecalculations.
Further, the independence of SMBC Nikko Securities has been ensured.
・ In addition, the Special Committee appointed Daiwa Securities as its independent
financial advisor and third-party valuator when it considered the Transactions, andobtained the Share Valuation Report (Daiwa Securities) from Daiwa Securities asmaterials concerning the value of the Target Shares.
・ The Special Committee also has confirmed the independence of Daiwa Securities as anadvisor (including independence from the Offeror Related Parties and the Target).
・ Based on the above, it has been determined that both the Share Valuation Report (Nikko
Securities) and the Share Valuation Report (Daiwa Securities) are share valuation reports
by independent third-party valuators.
(III) Receipt of the Fairness Opinion
・ Furthermore, in order to ensure the fairness of the Tender Offer Price, the Special
Committee obtained the Fairness Opinion from Daiwa Securities, which states that theTender Offer Price is fair from a financial point of view with respect to the Target’s
general shareholders, excluding the Offeror Related Parties and their affiliates.
・ The Special Committee believes that the Fairness Opinion can be evaluated as a measure
to ensure fairness.
(IV) Market check・ According to the Target Press Release Dated February 6, 2024, the Offeror plans to set theTender Offer Period at 20 business days, which is the shortest period provided by laws andregulations. However, the Tender Offer is a tender offer with a prior announcement, andsince a relatively long period of time will be secured until the commencement of theTender Offer, there will be reasonable opportunities for competing takeover offers by otherpotential acquirers.
・ In addition, there has been no agreement, nor has a transaction protection restriction been
imposed, between the Target and the Offeror to restrict contact with competing takeoverofferors (as defined in “(ix) Establishment of measures to ensure purchase opportunities
from other offerors” below).
Thus, in this case, an indirect market check is being conducted by conducting the M&A
after creating an environment in which other potential acquirers can make competing offers
after the announcement.
(V) Majority of minority
・ The majority-of-minority concept has not been adopted regarding the minimum number oftendered shares to be purchased.
・ Many measures to ensure fairness other than the establishment of the majority-of-minority
condition have been adopted in the implementation of the Tender Offer. Therefore, thefact that the majority-of-minority concept has not been adopted in the Tender Offer does134not in itself constitute an obstacle to the fairness of the terms and conditions of theTransactions.
(VI) Improved information provision to general shareholders and transparency of the process
・ The Target Press Release Dated February 6, 2024 discloses certain factors regarding theBusiness Plan, which is the premise for the DCF analysis in the Share Valuation Report(Nikko Securities) and the Share Valuation Report (Daiwa Securities).
・ Finally, other information, such as the process leading to the implementation of the M&A
and the background of negotiations, has been described in the Target Press Release Dated
February 6, 2024 in a substantial manner.
(VII) Elimination of Coercion
・ The Squeeze-out Procedure in the Transactions are to be executed by means of a processusing a share consolidation method. The shareholders have the right to file a court
petition to determine the price of the shares pursuant to Articles 182-4 and 182-5 of theCompanies Act, and this fact is explicitly disclosed in the Target Press Release Dated
February 6, 2024.
・ Furthermore, the Target Press Release Dated February 6, 2024 states that the Squeeze-out
Procedure will be conducted promptly after the completion of the Tender Offer, and thatthe amount of money delivered to minority shareholders in the Squeeze-out Procedure
will be calculated to be equal to the Tender Offer Price multiplied by the number of Target
Shares held by each such shareholder (excluding the Offeror Related Parties and theTarget).
・ In light of the above, measures have been taken to prevent coercion with respect to theTransactions.
3

Report on the Items for Consultation Matter (ii) (whether the fairness and appropriateness of the terms
and conditions of the Transactions (including the Tender Offer Price) are ensured)(i) Ensuring the status of negotiations
・ The negotiations were conducted fairly, with the Target receiving advice from SMBC Nikko
Securities on the Tender Offer Price, which resulted in a final agreement. The Special
Committee also was proactively involved in the negotiations by giving its opinion on thenegotiations at each of the relevant periods.
・ Under this system, the Target referred to the valuation calculated by SMBC Nikko Securities
below and also took into account the deliberations of the Special Committee and other factors,
and reached a final agreement after several rounds of price negotiations. Further, the final
Tender Offer Price (10,360 yen) was considerably higher than the price originally offered by
the Offeror (8,650 yen), and negotiations were carried out by the Target with the aim ofmaking the Transactions as favorable as possible to the general shareholders.
・ In view of the information above, the decision regarding the Transactions was made as a resultof significant discussions between the independent parties, and no circumstances have beenfound that raise suspicions regarding the transparency or fairness of the decision-making
process between the Target and the Offeror Related Parties.
(ii) Relationship between the share valuation report and the Tender Offer Price

135

・

Based on the following points, the Business Plan is considered to be reasonable from theperspective of the formulation process and the formulation method, as there is no evidence of
any intervening pressure from the Offeror Related Parties.
(I) Business Plan
・ Regarding the formulation of and updates to the Business Plan, it was based on a businessplan which was confirmed by the Special Committee with the advice of Daiwa Securities
and Nakamura, Tsunoda & Matsumoto, the independent advisor of the Special
Committee. As a result, no arbitrariness was found in this regard.
・ It is reasonable for the Business Plan (on a stand-alone basis) to also be used as the basis
for the calculation in this case.
・ In addition, in regard to the formulation of the Business Plan, “Challenge 2025” (which is
the three-year plan from FY 2023 to FY 2025 that was reported in the meeting of theboard of directors of the Target on April 13, 2023), and updates to the Business Plan madein August 2023 thereafter, although the involvement of seconded personnel from MC is
acknowledged, these documents were prepared both in the course of normal business
operations unrelated to the Transactions and prior to the consideration of the Transactions.
In addition, regarding the two-year plan from FY 2026 to FY 2027, although it was
prepared after the consideration of the Transactions, it was drafted under a system without
the involvement of the Offeror Related Parties, and the documents were prepared with theconfirmation of Sadanobu Takemasu, President and CEO, Representative Director of theTarget. In conclusion, the involvement of the seconded personnel from MC in theprocess of formulating the Business Plan does not raise suspicions about the fairness of thecontents of the Business Plan.
・ In addition, Daiwa Securities, the Special Committee’s independent financial advisor, also
has asked the Target the necessary questions about the matters that were considered andtaken into account in the process of formulating the Business Plan and the feasibility of theforward-looking statements. In conclusion, the Business Plan was not deliberately
suppressed in order to lower the Target’s share value assessment, and there are no doubts
by Daiwa Securities regarding the Business Plan.
(II) Relationship between the share valuation report and the Tender Offer Price
・ The price of 10,360 yen per share, the Tender Offer Price, (i) exceeds the upper limit of
the calculation result of the market price analysis and (ii) is in the range of the value of theshares calculated using the DCF analysis, which is considered to indicate the fundamental
value of the shares of the Target.
・ The Special Committee also considers that the Tender Offer Price has reached a level thatis not detrimental to minority shareholders, even from the perspective of comparison withthe valuation of the Target Shares calculated by Daiwa Securities and SMBC Nikko
Securities.
(III) Consideration of the Premium・ In relation to the closing price of the Target Shares on the TSE on February 5, 2024 (the“Day before Last”; hereinafter the same in this section), the Tender Offer Price is a pricecalculated by adding a premium of 18.79% on the closing price of the Day before Last,

136

27.05% on the average closing price over the past month on the Day before Last, 37.31%
on the average closing price over the past three months on the Day before Last, and42.62% on the average closing price over the past six months on the Day before Last.
・ From the perspective of comparing the premium level of the Tender Offer Price with otherdeals, the premium level of the Tender Offer Price is considered to be reasonable, taking
into account that although the premium level of the Tender Offer Price is below theaverage and median prices of 11 other deals selected as those announced after July 2019
(after the M&A Guidelines were published), and concluded by December 31, 2023, with amarket capitalization of 100 billion yen or more and target shares exceeding 1x PBR
before the deal was announced, based on the closing price of the Day before Last and theaverage closing price over the past month on the Day before Last (average and median
prices based on the closing price of the Day before Last (31.74% and 30.24%) and theaverage closing price over the past month on the Day before Last (33.57% and 34.98%)),
it is above the average and median prices of the 11 deals described above, based on the
average closing price over the past three months on the Day before Last and the averageclosing price over the past six months on the Day before Last (average and median prices
based on the average closing price over the past three months on the Day before Last
(35.17% and 34.09%) and the average closing price over the past six months on the Day
before Last (34.87% and 37.47%), and other factors.
(iii) Appropriateness of schemes
・ In implementing the Transactions, the structure of the Transactions is reasonable, in which theOfferor will acquire all of the Target’s Shares (including the American Depositary Receipts,
but excluding the Target Shares held by the Offeror Related Parties and the Target) and theStock Acquisition Rights, thereby acquiring all of Target’s Share Certificates to provide theTarget’s minority shareholders an opportunity to recover their investment.
(iv) Appropriateness of the purchase price of the Share Options
・ The Tender Offer also includes the Share Options, but the purchase price for all of the Share
Options is 1 yen.
・ According to the Target Press Release Dated February 6, 2024, at the time of theannouncement of the Tender Offer, the Target intends to express its opinion to the Share
Option Holders that it leaves the decision of whether or not to tender in the Tender Offer to the
Share Option Holders.
・ In view of the matters above, the Special Committee reserves its opinion on theappropriateness of the price of the Share Options in the Tender Offer.
4

Report on the Items for Consultation Matter (iv) (whether it is appropriate for the Target’s board of
directors to express an opinion in favor of the Tender Offer to recommend that the Target’s
shareholders tender in the Tender Offer and to recommend that the owners of American Depositary
Receipts deliver the American Depositary Receipts to the Depositary Banks in advance and receive
delivery of the Target Shares related to such American Depositary Shares represented by those
American Depositary Receipts to tender their shares in the Tender Offer and that it would leave thedecision as to whether to tender shares in the Tender Offer to the judgment of the Share Option

137Holders) and Consultation Matter (v) (in addition to Consultation Matters (i) to (iv), whether the
implementation of the Transactions would be considered advantageous to the Target’s minority
shareholders)・ As a result of the deliberations of the Special Committee, no issues have arisen in regard to
any of Consultation Matters (i) to (iii) above.
・ In view of the matters above, regarding Consultation Matters (iv) and (v), the Special
Committee shall express its opinion that (a) the board of directors of the Target is in favor of
the Tender Offer and recommends that the shareholders of the Target tender their shares in
the Tender Offer, (b) it recommends that the holders of the American Depositary Receipts
tender in the Tender Offer by delivering their American Depositary Receipts to the
Depositary Bank in advance and receiving delivery of the Target Shares related to such
American Depositary Shares represented on the American Depositary Receipt, and (c) that itleaves the decision of whether or not to tender in the Tender Offer to the Share Option
Holders.
・ However, since the Tender Offer, which is the first phase of the Transactions, is expected totake a reasonable period of time between its announcement and commencement, the Special
Committee intends to reconsider these points before the commencement of the Tender Offer.
Subsequently, on February 21, 2024, the Target received notification from the Offeror that the Offeror
expects the Competition Law Procedures to be completed by late March 2024, and based on that expectation,
the Tender Offer is expected to be commenced on March 28, 2024. In addition, on March 22, 2024, theTarget received a notification from the Offeror that the Tender Offer is scheduled to commence on March 28,2024 on the assumption that the Conditions Precedent had been satisfied since the Competition Law
Procedures have been completed.
Upon commencement of the Tender Offer, the Target asked the Special Committee on March 25, 2024 toconsider whether there were any changes in the opinions expressed by the Special Committee to the Target’s
board of directors on February 5, 2024 and requested that the Special Committee advise the Target’s boardof directors accordingly if there were no changes, or if any changes should be made, to state the amended
opinion.
At the 23rd Special Committee held on March 25, 2024, the Special Committee conducted a fact-checkwith the Target regarding whether there have been any significant changes in circumstances that could affect
the Transactions on and after February 5, 2024. As a result of considering the consultation matters, theSpecial Committee confirmed that there are no circumstances that would require the Special Committee tochange the opinions expressed to the Target’s board of directors on February 5, 2024, even taking into
account the circumstances from February 5, 2024 to March 26, 2024. On March 26, 2024, the Special
Committee submitted the Written Report Dated March 26, 2024 stating that it is considered that there wasno need to change the details of the report that the Special Committee made to the Target’s board of directors
on February 5, 2024, by unanimous resolution of all members.
(iii) Receipt of advice from an independent legal adviser by the Target
According to the Target, as described in “(ii) Establishment of independent special committee at the Target
and receipt of a written report from the special committee” above, the Target retained Anderson Mori &138

Tomotsune as its outside legal advisor independent of the Offeror Related Parties and the Target, and hasreceived legal advice from Anderson Mori & Tomotsune including advice on the measures to be taken to
ensure the fairness of the procedures for the Transactions, the procedures for the Transactions and the method
and process of decision-making by the Target concerning the Transactions.
Anderson Mori & Tomotsune does not constitute an Offeror Related Party or a Target related party andhas no material interest in the Transactions including the Tender Offer. According to the Target, although
the Target has executed a legal advisory agreement with Anderson Mori & Tomotsune, the firm is an external
legal firm which provides legal services to a number of clients, which is not limited to the Target, and theTarget, as one of the firm’s clients, executed the legal advisory agreement in order to request legal advice
based on its areas of expertise and specialties, and the fact of execution of such agreement will not violate
the independence of the same legal firm from the Target; in addition, since the firm is paid a fee calculated
by multiplying the hours of service rendered by an hourly rate regardless of whether the Transactions are
successfully completed and its fee does not include a performance fee conditioned on successful completionof the Transactions, it was determined that Anderson Mori & Tomotsune was independent of the Offeror
Related Parties and whether the Transactions are successfully completed. Furthermore, according to theTarget, the Special Committee, at its first meeting, confirmed that Anderson Mori & Tomotsune wasindependent and professionally qualified.
(iv) Receipt of a share valuation report from an independent financial adviser and third-party valuator by
the Target(A) Name of valuator and relationship with the Target and the Offeror Related Parties
According to the Target, the Target, in expressing its opinion concerning the Tender Offer, in order toensure the fairness of decision-making regarding the Tender Offer Price presented by the Offeror, requested
its financial advisor SMBC Nikko Securities, as a third-party valuator independent of the Offeror Related
Parties and the Target, to calculate the share value of the Target Shares, and obtained the Target Share
Valuation Report (Nikko Securities) on February 5, 2024. SMBC Nikko Securities does not constitute an
Offeror Related Party or a Target related party and has no material interest in the Transactions, including theTender Offer. SMBC Nikko Securities is one of the same group companies of Sumitomo Mitsui Financial
Group, Inc. as Sumitomo Mitsui Banking Corporation that conducts financing transactions as part of normalbanking transactions with the Target Group, the Offeror Group, and MC Group. However, according to
the Target, considering the past performance of SMBC Nikko Securities as a third-party valuator and basedon the fact that information blocking measures have been taken between the department which calculates
the value of the Target Shares in SMBC Nikko Securities, other departments in SMBC Nikko Securities, andSumitomo Mitsui Banking Corporation as measures to prevent adverse effects, that since the Target and
SMBC Nikko Securities conduct transactions based on the same transaction conditions as general customers,
SMBC’s independence as a financial advisor and third-party valuator has been secured, and that SMBC
Nikko Securities does not constitute a party related to the Target or the Offeror Related Parties, and that theTarget’s requests for SMBC Nikko Securities to calculate the value of the Target Shares are considered tohave no particular concerns, the Target appointed SMBC Nikko Securities as its financial advisor and thirdparty valuator. The Special Committee, at its first meeting, confirmed that SMBC Nikko Securities was
independent and professionally qualified, and approved the appointment thereof as the financial advisor andthird-party valuator of the Target. The Target has not obtained from SMBC Nikko Securities an opinion

139

concerning the fairness of the Tender Offer Price (fairness opinion) since the Target determined that themeasures to ensure the fairness of the Tender Offer Price and to avoid conflicts of interest have been
implemented and that fairness of the Transactions is sufficiently ensured.
According to the Target, with respect to the Transactions, SMBC Nikko Securities is paid a performancefee payable on condition that the Transactions are successfully completed. The Target appointed SMBC
Nikko Securities as its financial advisor and third-party valuator based on the above fee arrangement, taking
into account general practices in the same kind of transactions and the appropriateness of the fee arrangementin which the Target would incur a reasonable financial burden in the event that the Transactions are notsuccessfully completed, and also based on the determination that SMBC Nikko Securities’ independence
would not be denied by the fact that a performance fee payable on condition that the Transactions arecompleted is included.
(Note) In preparing the Share Valuation Report (Nikko Securities), SMBC Nikko Securities has assumed
that all of the materials and information used as the basis therefor are accurate and complete.
SMBC Nikko Securities has not conducted any independent verification of the accuracy andcompleteness of such materials and information, and assumes no obligation or responsibility forsuch verification. SMBC Nikko Securities assumed that the Target has not recognized any
facts or circumstances that render any of the information provided inaccurate or misleading.
SMBC Nikko Securities has not independently evaluated, appraised or assessed the assets or
liabilities of the Target and its affiliates, nor has it requested any third-party organization toevaluate, appraise, or assess such assets or liabilities. If any problems are found in the accuracy
and completeness of these materials and information, the results of the calculation may differ
significantly. Furthermore, SMBC Nikko Securities assumed that there are no claims or
obligations relating to undisclosed litigation, disputes, environment and taxation, etc. regarding
the Target and its affiliates, other contingent liabilities or off-the-book liabilities, or any other factthat would have a material effect on the Share Valuation Report (Nikko Securities). It was
assumed that the business plan used by SMBC Nikko Securities in the Share Valuation Report(Nikko Securities) was prepared by the Target with reasonable and appropriate procedures basedon the best estimate and judgment as of the reference date of making the calculation. In the
Share Valuation Report (Nikko Securities), when SMBC Nikko Securities conducted its analysis
based on the materials, information, and assumptions provided, it was assumed that the materials,
information, and assumptions provided are accurate and reasonable. SMBC Nikko Securities
has not independently verified the accuracy, appropriateness, and feasibility of theseassumptions, and assumes no obligation or responsibility therefor. The results of thecalculation by SMBC Nikko Securities have been submitted to the Target, at the request of theTarget, for the sole purpose of assisting the Target’s board of directors to consider the Tender
Offer Price. Such results of the calculation are not designed for expressing SMBC Nikko
Securities’ opinion as to the fairness of the Tender Offer Price.
(B) Overview of calculation
According to the Target, the Target, in expressing its opinion concerning the Tender Offer, requested its
financial advisor SMBC Nikko Securities, as a third-party valuator independent of the Offeror Related

140

Parties and the Target, to calculate the share value of the Target Shares, and obtained the Share Valuation
Report (Nikko Securities) on February 5, 2024.
In calculating the value of the Target Shares, SMBC Nikko Securities adopted the average market pricemethod since the Target Shares are listed on the TSE Prime Market and thus the market price thereof isavailable; and the DCF analysis to reflect in the share valuation the status of future business activities of theTarget.
The range of the value per share of the Target Shares calculated by SMBC Nikko Securities based on eachof the above methods is as follows.
Market price method: From 7,248 yen to 8,039 yen
DCF analysis:
From 9,609 yen to 14,907 yen
Under the average market price method, as of the reference date of February 2, 2024, which is twobusiness days immediately preceding the date of the announcement of the expected commencement of theTender Offer, the share value range per share of the Target Shares was calculated to be 7,248 yen to
8,039 yen, based on the simple average of the closing prices for the previous one month of the Target Shareson the TSE Prime Market (8,039 yen), the simple average of the closing prices for the previous three months(7,526 yen), and the simple average of the closing prices for the previous six months (7,248 yen). Under
the DCF analysis, the share value range per share of the Target Shares was calculated to be 9,609 yen to
14,907 yen by calculating the Target’s corporate value and share value based on various elements such as
the Business Plan prepared by the Target, and information generally disclosed to the public, and discounting
at a certain rate to the present value the free cash flow projected to be generated by the Target in and after the
fourth quarter of its fiscal year ending February 2024. The Business Plan prepared by the Target, which
was used for the calculation under the DCF analysis by SMBC Nikko Securities, does not include any fiscal
year in which significant year-on-year increases or decreases in profits are expected. The synergies
expected to be realized through the implementation of the Transactions were not included in the financial
forecast as it was difficult to estimate the same specifically as of February 5, 2024.
(v) Receipt of advice from an independent legal adviser by the Special Committee
According to the Target, as described in “(ii) Establishment of independent special committee at the Target
and receipt of a written report from the special committee” above, the Target retained Nakamura, Tsunoda& Matsumoto as its outside legal advisor independent of the Offeror Related Parties and the Target, and hasreceived legal advice from Nakamura, Tsunoda & Matsumoto, including advice on the measures to be taken
to ensure the fairness of the procedures for the Transactions, the procedures for the Transactions, and themethod and process of decision-making by the Target concerning the Transactions.
Nakamura, Tsunoda & Matsumoto does not constitute an Offeror Related Party or a Target related party
and has no material interest in the Transactions, including the Tender Offer. Nakamura, Tsunoda &Matsumoto is paid a fee calculated by multiplying the hours of service rendered by an hourly rate regardlessof whether the Transactions are successfully completed, and its fee does not include a performance fee
conditioned on successful completion of the Transactions.
(vi) Receipt of a share valuation report and the Fairness Opinion from an independent third-party valuator141

by the Special Committee(A) Name of valuator and relationship with the Offeror Related Parties and the Target
According to the Target, the Special Committee, in considering the Consultation Matters, in order toensure the fairness of the terms and conditions regarding the Transactions, including the Tender Offer Price,
requested its financial advisor Daiwa Securities, as a third-party valuator independent of the Offeror Related
Parties and the Target, to calculate the share value of the Target Shares, and obtained a share valuation report
regarding the share valuation result of the Target Shares (the “Share Valuation Report (Daiwa Securities)”)on February 5, 2024. In addition, the Special Committee requested a third-party valuator independent of
the Offeror Related Parties and the Target, Daiwa Securities, to submit a fairness opinion to the effect thatthe terms and conditions regarding the Transactions, including the Tender Offer Price, are fair (the “Fairness
Opinion”), and received the Fairness Opinion on February 5, 2024. Daiwa Securities does not constitutean Offeror Related Party or a Target related party and has no material interest in the Transactions, including
the Tender Offer. The Special Committee, at its first meeting, confirmed that Daiwa Securities was
independent and professionally qualified, and appointed Daiwa Securities as the Special Committee’s
financial advisor and third-party valuator.
With respect to the Transactions, Daiwa Securities is paid only a fixed fee amount, which will be paid
regardless of whether the Transactions are successfully completed, and its fee does not include a performancefee conditioned on successful completion of the Transactions.
(B) Overview of calculation
According to the Target, the Special Committee, in considering the Consultation Matters, requested its
financial advisor Daiwa Securities, as a third-party valuator independent of the Offeror Related Parties andthe Target, to calculate the share value of the Target Shares, and obtained the Share Valuation Report (Daiwa
Securities) on February 5, 2024.
After considering the valuation method that should be adopted among various share valuation methods
when assessing the Target Shares, Daiwa Securities assessed the per share value of the Target Shares using(i) market price analysis, because the Target Shares are listed on the Prime Market of the TSE and thus themarket price thereof is available and (ii) DCF analysis so as to reflect the details of the Target’s performanceand forecasts in the valuation, based on the premise that the Target is a going concern and from theperspective that it would be appropriate to assess the value of the Target Shares in multiple ways. On
February 5, 2024, the Special Committee obtained the Share Valuation Report (Daiwa Securities).
According to Daiwa Securities, the share value range per share of the Target Shares calculated using eachof the above methods is as follows:
Market price analysis:
DCF analysis:

7,264 yen to 8,721 yen
7,037 yen to 14,514 yen

In the market price analysis, February 5, 2024 was used as the valuation base date, and the per sharevalue of the Target Shares was assessed to range from 7,264 yen to 8,721 yen, based on the fact that theclosing price of the Target Shares listed on the Prime Market of the TSE on the valuation base date was 8,721
yen and the simple averages of closing prices of the Target Shares listed on the Prime Market of the TSE142over the last one month was 8,154 yen, over the last three months was 7,545 yen, and over the last six months
was 7,264 yen.
In the DCF analysis, with various elements such as the Business Plan prepared by the Target and publicly
disclosed information, etc., as a basis, the Seijo Ishii business, the Chinese business and all business with the
Seijo Ishii Business and the Chinese Business excluded from the consolidated business (the “Target’s
Consolidated Business (Excluding the Seijo Ishii Business and the Chinese Business)”) was analyzed, andthe Target’s enterprise value and share value were calculated by discounting the free cash flow that is
expected to be generated by the Target from the fourth quarter of the fiscal year ending February 2024
onward to the present value with a certain discount rate, and as a result, the per share value of the Target
Shares was assessed to range from 7,037 yen to 14,514 yen. The Business Plan prepared by the Target thatwas used by Daiwa Securities for the valuation through the DCF analysis includes fiscal years in which asubstantial increase/decrease in profit is expected. Specifically, in the Target’s Consolidated Business(Excluding the Seijo Ishii Business and the Chinese Business), a significant increase in free cash flow (fiscal
year ending February 2026: 44,551 million yen, year over year increase of 57.0%; fiscal year ending
February 2027: 60,948 million yen, year over year increase of 36.8%) due to improved profitability throughrecovery of human flow, price increases, etc., is expected. In addition, the financial forecast does not reflect
the synergy effects expected from the Transactions being consummated because it is difficult to specificallyestimate those synergy effects as of February 5, 2024.
(C) Overview of the Fairness Opinion
According to the Target, on February 5, 2024, the Special Committee obtained from Daiwa Securities the
Fairness Opinion to the effect that the purchase price per Target Share of 10,360 yen is fair to the Target’s
general shareholders, excluding the Offeror Related Parties and its affiliates, from a financial perspective.
The Fairness Opinion was prepared with the approval of the fairness opinion board at Daiwa Securities,
based on the valuation of shares of the Target conducted by Daiwa Securities through the analysis of financial
information including business forecasts of the Target and Q&A sessions with the Special Committee, as
well as Q&A sessions with the Target and the Special Committee conducted by Daiwa Securities regarding
the background and circumstances leading to the approval of the Tender Offer.
(Note) Daiwa Securities has assumed and relied on the accuracy and completeness of all informationthat Daiwa Securities has analyzed or reviewed, and has not independently verified, or assumed
any obligation to independently verify, the accuracy or completeness of such information. In
stating its opinion contained in the Fairness Opinion, Daiwa Securities has assumed that as ofthe date on which the opinion contained in the Fairness Opinion is stated, there has occurred no
event relating to the Target that is undisclosed to Daiwa Securities that would affect the corporate
value of the Target. Daiwa Securities has not undertaken an independent evaluation, appraisal orassessment of any of the assets or liabilities (including, but not limited to, financial derivative
products, off-balance-sheet assets and liabilities and other contingent liabilities), on an aggregate
or individual basis, of the Target or any of their respective affiliates, nor has Daiwa Securities
made any request to a third party for any such valuation, appraisal or assessment. Daiwa
Securities has not evaluated the solvency or creditworthiness of the Target or any of theirrespective affiliates under any applicable laws relating to bankruptcy, insolvency or similar
matters. Daiwa Securities has not conducted any physical inspection of the properties or143

facilities of the Target or any of their respective affiliates, nor has Daiwa Securities assumed any
obligation to do so.
In preparing the Fairness Opinion, Daiwa Securities has assumed that the business plans,
financial forecasts and other information regarding the future furnished to Daiwa Securities havebeen prepared according to reasonable and appropriate procedures, and reflect the best estimatesand judgment of the management of the Target available at the time of calculation, and with theconsent of the Target, Daiwa Securities has relied on such information without conducting any
independent verifications of the accuracy, validity or feasibility of the business plans of bothcompanies. Daiwa Securities has assumed that all assumptions for the preparation of thebusiness plans and financial forecasts are accurate and feasible. Daiwa Securities has assumed
that the business plans, financial forecasts and other information regarding the future furnished
to Daiwa Securities have not changed since the date they were prepared or provided in any way
that would materially affect the Target’s assets, financial condition, business or future
projections. In stating its opinion contained in the Fairness Opinion and making analyses as
the basis of such opinion, Daiwa Securities set a number of assumptions regarding the industry
situations, the state of general business and economy and other matters, many of which are notwithin the control of the Target. The estimates contained in such analyses of Daiwa Securities
are not necessarily indicative of future results or actual values, which may be significantly moreor less favorable than those suggested by such estimates.
In expressing the opinions contained in the Fairness Opinion, Daiwa Securities assumed that
all consents and approvals from the government and supervisory authorities that are necessary
for the successful completion of the Transactions were obtained by the Target or the Offeror
without affecting in any manner the anticipated benefits of the Transactions. Daiwa Securities
has not evaluated the decision of the Target with respect to its execution of the Tender Offer or
the relative merits of the Tender Offer as compared to any strategic alternatives that may beavailable to the Target, nor has Daiwa Securities been requested the Target to do so. Daiwa
Securities is not a legal, accounting or tax expert and has neither independently analyzed orreviewed nor assumed any obligation to independently analyze or review the legality or validityof any matter regarding the Tender Offer or the appropriateness of the accounting and tax
treatment of any matter regarding the Tender Offer.
Daiwa Securities is expected to receive a fixed compensation for its services related to theTransactions, irrespective of whether the Transactions are successfully completed. Also,
Daiwa Securities is expected to receive reimbursement from the Target of any expenses incurredin the course of the provision of its services. The Target understands that Daiwa Securities andits affiliates have provided, or may provide in the future, services for transactions to Offeror, MC
and their affiliates, for which Daiwa Securities and its affiliates have received, or may receive,compensation, and has given prior consent to the provision of such services without any
objection. In addition, Daiwa Securities and its affiliates may actively trade or hold financial
products, including securities and derivatives products, of the Target or any of their respective
affiliates, for the accounts of Daiwa Securities or its affiliates or for the accounts of customers.
The Fairness Opinion was prepared solely in order that Daiwa Securities may provide theSpecial Committee with reference information to review the Tender Offer Price. Daiwa

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Securities does not recommend to the Special Committee any particular purchase price, nor does
it recommend that any particular purchase price is the only appropriate purchase price. In
addition, neither the Target nor the Special Committee may disclose the Fairness Opinion to any
third party without the prior written consent of Daiwa Securities. The Fairness Opinion is notaddressed to any third party other than the Target and no third party may trust or rely on theopinion for any purpose.
Moreover, the Fairness Opinion does not constitute a
recommendation or solicitation to any general shareholders of the Target as to how suchshareholders should vote on the Tender Offer, the transfer or receipt of shares of the Target or
any other related matters.
The Fairness Opinion addresses only the fairness of Tender Offer Price from a financial pointof view to the holders of the general shareholders of the Target other than the Offeror, MC andtheir affiliates, and the Target has not asked Daiwa Securities to address, and the Fairness Opinion
does not address, the fairness to, or any other consideration of, any third party excluding thegeneral shareholders of the Target other than the Offeror, MC and their affiliates. Daiwa
Securities does not provide any opinion on any premise or assumption upon which thedetermination of Tender Offer Price was based or the underlying business decision of the Target
to proceed with the Tender Offer. Daiwa Securities is also not expressing any opinion as to theprices at which the shares of common stock of the Target will be traded at any time after the dateof this opinion. In addition, Daiwa Securities expresses no opinion with respect to the fairnessof the amount or nature of any compensation to be received in relation to the Tender Offer Priceby any officer, director, employee or any similar such person involved in the Tender Offer.
Daiwa Securities is not authorized by the Target or the Targets board of directors or Special
Committee to solicit a decision of a third party concerning the Transactions, and has not solicited
such in the past.
The Fairness Opinion is also based upon financial, economic, market and other conditions as
they exist as of the date of the Fairness Opinion, and relies on information made available to
Daiwa Securities by the date of the Fairness Opinion. Additionally, although the Fairness
Opinion may be affected by future changes in conditions, Daiwa Securities does not assume
any obligation to revise, change, renew, supplement or reaffirm the Fairness Opinion.
(vii) Establishment of independent review system at the Target
According to the Target, as described in “(II) Decision-making process leading to and grounds for theopinion in favor of the Tender Offer by the Target” under “(2) Background, purpose and decision-making
process leading to the decision to conduct the Tender Offer, and management policy following the Tender
Offer” in “1. Purposes of Tender Offer” above, considering the fact that the Transactions, including theTender Offer, fall under the type of transaction involving the issue of structural conflicts of interest andinformation asymmetry with minority shareholders, the Target has established a system within the Target toreview, negotiate, and make decisions regarding the Transactions from a standpoint independent of theOfferor Related Parties. Specifically, according to the Target, on September 1, 2023, after the Target
received the Transactions (Initial Proposal) from the Offeror Related Parties, a project team with the purpose
to conduct a review regarding the Transactions (including preparation of the business plan which serves asa basis for the valuation of the Target’s share value) and consultation and negotiations with the Offeror

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Related Parties was established, and its members are comprised of the Target’s officers and employees who
do not concurrently hold the position of officer or employee of any company in the Offeror Related Parties
group (excluding the Target Group other than MC), and such team continues to date.
In addition, according to the Target, an approval by the Special Committee was obtained that the review
system by the Target (including the scope of officers and employees of the Target who will be involved in
the review, negotiation, and judgment for the Transactions and their duties) has no concerns from theviewpoint of independence and fairness.
(viii) Unanimous approval of all disinterested directors of the Target and the opinion of all auditors of theTarget that they have no objection
According to the Target, as described in “(II) Decision-making process leading to and grounds for theopinion in favor of the Tender Offer by the Target” under “(2) Background, purpose and decision-making
process leading to the decision to conduct the Tender Offer, and management policy following the Tender
Offer” in “1. Purposes of Tender Offer” above, the Target’s board of directors carefully considered anddiscussed whether the Transactions, including the Tender Offer, would contribute to the enhancement of thecorporate value of the Target and whether the terms and conditions of the Transactions, including the Tender
Offer Price, are appropriate, based on legal advice received from Anderson Mori & Tomotsune, advice
received from SMBC Nikko Securities, and the details of the Share Valuation Report (Nikko Securities),with the utmost respect for the details of the Special Committee’s judgment expressed in the Written Report
Dated February 5, 2024.
As a result, according to the Target, as described in “(II) Decision-making process leading to and grounds
for the opinion in favor of the Tender Offer by the Target” under “(2) Background, purpose and decisionmaking process leading to the decision to conduct the Tender Offer, and management policy following theTender Offer” in “1. Purposes of Tender Offer” above, the Target determined that 10,360 yen per share, theTender Offer Price, is a reasonable price that ensures that the benefits to be enjoyed by the Target’s minority
shareholders and that other conditions of the Tender Offer are fair; therefore, the Tender Offer provides theTarget’s minority shareholders with a reasonable opportunity to sell the Target Shares at a price with anappropriate premium, and resolved, at the Target’s board of directors meeting held on February 6, 2024, (i)to express the Target’s current opinion as of the same date in favor of the Tender Offer if the Tender Offer
commences; (ii) to recommend that the shareholders of the Target tender their shares in the Tender Offer;(iii) to recommend that the owners of the American Depositary Receipts deliver the American Depositary
Receipts to the Depositary Banks in advance and receive the delivery of the Target Shares represented by therelevant American Depositary Receipts to tender their shares in the Tender Offer; and (iv) that the Target
would leave the decision as to whether or not to tender their shares in the Tender Offer to the judgement of
the Share Option Holders.
Subsequently, on February 21, 2024, according to the Target, the Target received notification from theOfferor that the Offeror expects the Competition Law Procedures to be completed by late March 2024, andbased on that expectation, the Tender Offer is expected to be commenced on March 28, 2024. In addition,
on March 22, 2024, the Target received a notification from the Offeror that the Tender Offer is scheduled tocommence on March 28, 2024 on the assumption that the Conditions Precedent had been satisfied since theCompetition Law Procedures have been completed.

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In response, according to the Target, the Target asked the Special Committee on March 25, 2024 toconsider whether there were any changes in the opinions expressed to the Target’s board of directors on
February 5, 2024 and requested that the Special Committee advise the Target’s board of directors accordingly
if there were no changes, or if any changes should be made, to state the amended opinion. On March 26,
2024, the Special Committee submitted the Written Report Dated March 26, 2024 stating that it is consideredthat there was no need to change the contents of the report that the Special Committee made to the Target’s
board of directors on February 5, 2024. Therefore, the Target once again carefully discussed andconsidered the terms and conditions regarding the Tender Offer, taking into account the details of the written
report and changes in the Target’s business performance and market environment after the board of directors
meeting held on February 6, 2024.
As a result, the Target believes that, even as of today, the implementation of the Transactions would
contribute to enhancing the corporate value of the Target, that the purpose of the Transactions and thesignificance and necessity of achieving that purpose will only increase and will not diminish, and that there
were no factors that would change the Target’s judgment regarding the Tender Offer as of February 6, 2024.
Accordingly, at the board of directors meeting held today, the Target once again resolved to the effect that itshall express its opinion in favor of the Tender Offer and recommend that the Target’s shareholders tendertheir shares in the Tender Offer, that it recommends that holders of American Depositary Receipts tender in
the Tender Offer by delivering their American Depositary Receipts to the Depositary Bank in advance andreceiving delivery of the Target Shares related to such American Depositary Shares represented by theAmerican Depositary Receipts, and that it leaves to the Share Option Holders the decision as to whether totender in the Tender Offer. Further, according to the Target, the Target reported to the Offeror today that asof today, there are no material facts regarding the Target’s business, etc. that have not been disclosed, or facts
in connection with the implementation of a tender offer, etc. with respect to the Target’s Share Certificatesthat have not been disclosed.
According to the Target, at both of the Target’s board of directors meetings above, of the five directors of
the Target, the above resolution was unanimously passed after discussion by three directors of the Target,
excluding two directors, Mr. Masayuki Itonaga and Mr. Kiyotaka Kikuchi (that is, Mr. Sadanobu Takemasu,
Ms. Miki Iwamura, and Ms. Satoko Suzuki). At both of the Target’s board of directors meetings above, allof the five auditors expressed their opinion that they have no objection to the above resolution.
In light of the fact that on and before April 1, 2022, Mr. Masayuki Itonaga concurrently held the positionof officer at Mitsubishi Corporation Financial & Management Services (Japan) Ltd., MC’s subsidiary, andMr. Kiyotaka Kikuchi concurrently holds the position of managing executive officer at MC, in order toeliminate, as much as possible, possible impact of the issues of structural conflicts of interest and information
asymmetry with minority shareholders through the Transactions, they did not participate in the meeting andrefrained from expressing their opinion. On the other hand, although Mr. Sadanobu Takemasu previously
worked at MC, more than nine years has passed since he was transferred from MC to the Target and is notin a position to receive instructions from the Offeror Related Parties, and the side of the Offeror Related
Parties has never been involved in the Transactions and is not in a position to be involved therein.
Therefore, since it has been determined that the Target’s decision-making in the Transactions has no risk of
a conflict of interest, he has participated in the discussions and resolutions at both of the Target’s board of
directors meetings above.

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(ix) Establishment of measures to ensure purchase opportunities from other offerors
Since there is a substantial period from February 6, 2024, the date of announcement of the Tender Offer,to commencement of the Tender Offer, the Offeror believes that an opportunity for the Target’s minority
shareholders to make an appropriate decision regarding the tender of the Tender Offer and an opportunity
for persons other than the Offeror to purchase the Target Shares are secured. In addition, the Offeror
Related Parties, in the Master Agreement, agree not to directly or indirectly make any proposal, solicitation,
provision of information, or consultation on competing transactions with any third party until completion of
the Transactions, and not to conduct any act that conflicts with or infringes on the Transactions such as anagreement related to competing transactions (including the exercise or non-exercise of voting rights at theTarget’s shareholders’ meeting that conflict with or infringe on the Transactions), but the Offeror Related
Parties have not made any agreement that contains a transaction protection clause that prohibits the Target
from contacting persons other than the Offeror Related Parties (the “Competitive Purchasers”), or any otheragreement that restricts contacts between the Competitive Purchasers and the Target. Since there is a
substantial period until the commencement of the Tender Offer as stated above and an opportunity forcompetitive purchases has been secured, due consideration is given to ensure the fairness of the Tender Offer.
(x) Establishment of measures to ensure opportunity for the Target’s shareholders to make an appropriate
decision on whether to tender their shares in the Tender Offer
As described in “(4) Policies on organizational restructuring, etc. after the Tender Offer (mattersconcerning ‘two-step acquisition’)” in “1. Purposes of Tender Offer” above, (A) promptly after completionof the settlement of the Tender Offer, the Offeror plans to request that the Target convene the Extraordinary
Shareholders’ Meeting, at which the matters for resolution shall include a partial amendment of the articles
of incorporation to abolish the provision concerning the share unit number on the condition that the Share
Consolidation takes effect, and a method that does not secure the right to demand purchase of shares or theright to demand price determination of the owners of the American Depositary Receipts will not be adopted;
and (B) the Offeror clarified that the amount of money to be delivered to the Target’s shareholders as
consideration in the Share Consolidation will be calculated to be the same as the Tender Offer Pricemultiplied by the number of the Target Shares owned by each of the relevant shareholders of the Target; thus,
the Offeror gave consideration so that the Target’s shareholders and owners of the American Depositary
Receipts will have the opportunity to make an appropriate decision on whether or not to tender their sharesin the Tender Offer, and so as not to cause any coercion.
Furthermore, since the Offeror Related Parties hold 52,260,100 shares of the Target Shares in total(ownership ratio: 52.16%) as of today, the Offeror believes that because setting a minimum number of the“Majority of Minority” in the Tender Offer would destabilize the successful completion of the Tender Offer,
which in turn might not serve the interests of minority shareholders who wish to tender in the Tender Offer,
it has not set a minimum number of the “Majority of Minority” in the Tender Offer. However, since theOfferor Related Parties and the Target has taken the measures in (i) through (x), they believe that due
consideration was given to the interests of the Target’s minority shareholders.
(III) Relationship with valuator

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The Offeror’s financial advisor and third-party valuator, UBS Securities, does not constitute an Offeror
Related Party or the Target’s related party and has no material interest in the Transactions including theTender Offer.
(5)
Number of share certificates to be purchased
Number of shares to be purchased Minimum number of shares to bepurchased
47,923,815 shares

14,458,500 shares

Maximum number of shares to bepurchased- shares(Note 1) If the total number of the Tendered Shares is less than the minimum number of shares to be purchasedin the Tender Offer (14,458,500 shares), the Offeror will purchase none of the Tendered Shares. If thetotal number of the Tendered Shares is not less than the minimum number of shares to be purchased in
the Tender Offer (14,458,500 shares), the Offeror will purchase all of the Tendered Shares.
(Note 2) As the Tender Offer does not set the maximum number of shares to be purchased, 47,923,815 shares,
which is the largest number of the Target Shares that the Offeror may acquire through the Tender Offer,is stated as the number of shares to be purchased. The largest number is the number obtained by adding
the total number of issued shares as of January 12, 2024 (100,300,000 shares) as stated in the Target’s
third Quarterly Report to the number of the Target Shares underlying the Share Options(106,000 shares), less the number of treasury shares held by the Target on February 29, 2024 as
informed by the Target (222,085 shares) and the number of the Target Shares owned by the Offeror
Related Parties (52,260,100) as of today (47,923,815 shares).
(Note 3) Shares constituting less than one unit (tangen-miman kabu) are also subject to the Tender Offer. If ashareholder exercises the right to demand purchase of shares constituting less than one unit pursuant to
the Companies Act, the Target may purchase these shares during the Tender Offer Period in accordancewith statutory procedures.
(Note 4) The treasury shares held by the Target are not scheduled to be acquired through the Tender Offer.
(6) Changes in ownership ratio of share certificates due to tender offer
Number of voting rights pertaining(Ownership ratio of share certificates before theto the share certificates held by the
21,100 tender offer
Offeror before the tender offer
2.11%)
Number of voting rights pertaining(Ownership ratio of share certificates before theto the share certificates held by
501,501 tender offer
special related parties before the50.06%)
tender offer
Number of voting rights pertaining(Ownership ratio of share certificates after theto the share certificates held by the
500,338 tender offer
Offeror after the tender offer
49.94%)
Number of voting rights pertaining(Ownership ratio of share certificates after theto the share certificates held by
501,501 tender offer
special related parties after the
50.06%)
tender offer

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Total number of voting rights of all
999,718
shareholders(Note 1) “Number of voting rights pertaining to the share certificates held by special related parties before thetender offer” is the sum of the number of voting rights pertaining to Share Certificates, etc. held by
each special related party (excluding those excluded from special related parties pursuant to Article 3,
paragraph 2, item (i) of the Cabinet Office Ordinance on Disclosure Required for Tender Offer for
Share Certificates, etc. by Person Other Than Issuer (Ministry of Finance Order No. 38 of 1990, as
amended (the “Cabinet Office Order”)) in calculating the Shareholding Ratio of Share Certificates, etc.
in each item of Article 27-2, paragraph 1 of the Act among special related parties). Since the sharecertificates held by each special related party excluding the Target Shares held by MC(50,150,100 shares) are subject to the Tender Offer, “Number of voting rights pertaining to the sharecertificates held by special related parties after the tender offer” is 501,501.
(Note 2) “Number of voting rights pertaining to the share certificates held by the Offeror after the tender offer”
is the number obtained by adding the total number of issued shares as of January 12, 2024
(100,300,000 shares) as stated in the Target’s third Quarterly Report to the number of the Target Shares
underlying the Share Options (106,000 shares), less the number of treasury shares held by the Target on
February 29, 2024 as informed by the Target (222,085 shares) and the number of the Target Shares
owned by MC (50,150,100) as of today (50,033,815 shares).
(Note 3) “Total number of voting rights of all shareholders” is the number of voting rights of all shareholders(the number of shares per unit is listed as 100 shares) as of August 31, 2023 as stated in the Target’s
third Quarterly Report. However, because shares less than one unit and the Share Options are also
subject to tender offers, “Ownership ratio before the tender offer” and “Ownership ratio after the tender
offer” are calculated based on the denominator of the Total Number of Shares After Adjustment for
Diluted Shares (1,001,839).
(Note 4) “Ownership ratio of share certificates before the tender offer” and “Ownership ratio of share certificatesafter the tender offer” are rounded to the nearest second decimal place.
(Note 5) au Asset Management Corporation, which falls under the category of a special related party based on
the Offeror’s formal criteria (the “Special Related Party” in this (Note 5)), is engaged in the Investment
Management Business (as listed in Article 28, paragraph 4 of the Act; hereinafter the same applies),and a trust bank or similar institution may own, or may acquire or transfer in the future the Target’s
Share Certificates based on investment instructions from the Special Related Party. Therefore,
pursuant to Article 27-5, item (ii) of the Act, the Special Related Party filed today with the DirectorGeneral of the Kanto Local Finance Bureau a notification requesting application of the special
provisions for prohibition of separate purchases (the “Notification” in this (Note 5)), pledging that:(i)the Special Related Party has not agreed with the Offeror to jointly acquire or transfer theTarget’s Share Certificates, to jointly exercise their voting rights or other rights as shareholdersof the Target, or to mutually transfer or accept a transfer of the Target’s Share Certificates after
the Tender Offer as of the filing date of the Notification, and it does not fall under the categories
of persons listed in Article 27-2, paragraph 7, item (ii) of the Act;(ii)
the Special Related Party will not purchase share certificates, etc. issued by the Target in any
business other than the Investment Management Business during the Tender Offer Period;

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(iii)

during the Tender Offer Period, the Special Related Party will not transfer share certificates,etc. issued by the Target and held by the Special Related Party to the Offeror or its special
related parties (excluding special related parties who have made a request pursuant to Article
27 -5, item (ii) of the Act; hereinafter the same applies in this (Note 5) and (Note 6) below),
nor will it exercise its voting rights or other rights as a shareholder or investor of the Target
jointly with such persons;(iv)
the Special Related Party is engaged in the Investment Management Business, and there is apossibility that a trust bank or similar institution will acquire or transfer share certificates , etc.
issued by the Target based on investment instructions from the Special Related Party, but theSpecial Related Party will not issue investment instructions to the effect that share certificates,
etc issued by the Target should be transferred to the Offeror or its special related parties during
the Tender Offer Period; and(v)
the Special Related Party is engaged in the Investment Management Business, and there is apossibility that a trust bank or similar institution will exercise voting rights pertaining to sharecertificates, etc. issued by the Target based on instructions from the Special Related Party, but
the Special Related Party will not issue instructions to the effect that voting rights and otherrights as a shareholder or investor of the Target should be exercised jointly with the Offeror
and its special related parties during the Tender Offer Period.
(Note 6) au Kabucom Securities Co., Ltd., which falls under the category of a special related party based on theOfferor’s formal criteria (the “Special Related Party” in this (Note 6)), is engaged in, as a financial
instruments business operator, margin transactions (meaning transactions in which the Special Related
Party grants credit to customers premised on security deposits and holds share certificates, etc.
purchased pursuant to their instructions in the name of the Special Related Party; hereinafter the same
applies), brokerage transactions (meaning transactions in which the Special Related Party conducts
transactions pursuant to the instructions of a customer and the customer holds share certificates , etc.
purchased in the customer’s own name; hereinafter the same applies) and share loan services (meaningtransactions in which the Special Related Party receives a loan of share certificates, etc. held by acustomer; hereinafter the same applies) based on written agreements and contracts on establishment ofmargin transaction accounts with customers and other terms and conditions. Thus, the Special
Related Party may own, acquire, or transfer in the future the Target’s Share Certificates pursuant to the
instructions of customers. Therefore, pursuant to Article 27-5, item (ii) of the Act, the Special Related
Party filed today with the Director-General of the Kanto Local Finance Bureau a notification requesting
application of the special provisions for prohibition of separate purchases (the “Notification” in this(Note 6)), pledging that:(i)the Special Related Party has not agreed with the Offeror to jointly acquire or transfer theTarget’s Share Certificates, to jointly exercise their voting rights or other rights as shareholdersof the Target, or to mutually transfer or accept a transfer of the Target’s Share Certificates after
the Tender Offer as of the filing date of the Notification, and it does not fall under the categories
of persons listed in Article 27-2, paragraph 7, item (ii) of the Act;(ii)
the Special Related Party will not purchase the Target’s Share Certificates on the Special
Related Party’s own account during the Tender Offer Period (however, in the event of an
accident (such as clerical error by the Special Related Party or system failure) in connection151

(iii)

with the purchase of the Target’s Share Certificates by a customer, the Special Related Party
may accept the Target’s Share Certificates for its own account for customer protection. In suchcases, the Special Related Party will promptly dispose of the Target’s Share Certificates in themarket and will not exercise its voting rights or other rights as a shareholder of the Target);andduring the Tender Offer Period, the Special Related Party will not transfer the Target’s Share
Certificates owned by the Special Related Party to the Offeror and its special related parties
that have been purchased by the Special Related Party pursuant to the customer’s instructions
based on written agreements and contracts on establishment of margin transaction accounts orother terms and conditions between the Special Related Party and its customers for the
implementation of margin transactions, brokerage transactions and share loan services
executed between the Special Related Party and its customers, except for the disposition to bemade pursuant to the customer’s instructions (including tender shares for the Tender Offer),
nor will it exercise its voting rights and other rights as a shareholder of the Target jointly withsuch persons.

(7) Purchase price 496,490,723,400 yen(Note) The purchase price indicated is the amount obtained by multiplying the number of shares to bepurchased stated in “(5) Number of share certificates to be purchased” above by the Tender Offer Price(10,360 yen) per share of the Target Shares.
(8) Method of settlement(I) Name and location of head office of financial instruments business operator or bank handling settlementof the tender offer
Nomura Securities Co., Ltd.
1-13-1 Nihonbashi, Chuo-ku, Tokyo(II) Commencement date of settlement
May 7, 2024 (Tuesday)(Note) Subject to Article 27-10, paragraph 3 of the Act, if the Target submits an opinion report
requesting an extension of the Tender Offer Period, the commencement date of the settlement will be
May 20, 2024 (Monday).
(III) Method of settlement
Without delay after expiration of the Tender Offer Period, a notice of purchase through the tender offer
will be mailed to the addresses of persons who consent to the offer to purchase, etc., or make an offer tosell, etc., share certificates, etc. related to the Tender Offer (the “Tendering Shareholders”) (or theirstanding proxy in the case of foreign shareholders who do not have an account with the tender offer agent
that allows transactions (including corporate shareholders, etc.)).
The purchase is made for cash. Tendering Shareholders may receive the proceeds from the Tender
Offer without delay after the commencement date of the settlement by the method instructed by theTendering Shareholders, such as remittance (there may be a remittance charge).

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(IV) Method of returning share certificates, etc.
If it is decided that none of the Tendered Shares will be purchased in accordance with the conditions
stated in “(I) Whether there are conditions listed in each item of Article 27-13, paragraph (4) of the Act,and the details thereof” or “(II) Whether there are conditions for withdrawal of the Tender Offer, thedetails thereof, and how to disclose any such withdrawal” in “(9) Other conditions and method of tender
offer” below, the share certificates required to be returned will be promptly returned two business days
following the last day of the Tender Offer Period (where the Tender Offer has been withdrawn, thebusiness day following the day when the withdrawal was made). Shares will be returned by restoring
the records of the shares to be returned to the status immediately before they were tendered in theTendering Shareholders’ account with the tender offer agent (in the event of transferring the shares to a
Tendering Shareholder’s account set up with another financial instruments business operator, etc., pleasecontact the head office of the tender offer agent who accepted the tender or any of its branches
nationwide). Regarding share options, documents submitted upon the tender of share options will be
returned by being delivered to the Tendering Shareholders or being mailed to the addresses of theTendering Shareholders in accordance with their instructions.
(9) Other conditions and method of tender offer(I) Whether there are conditions listed in each item of Article 27-13, paragraph (4) of the Act, and the details
thereofIf the total number of the Tendered Shares is less than the minimum number of shares to be purchasedin the Tender Offer (14,458,500 shares), the Offeror will purchase none of the Tendered Shares. If thetotal number of the Tendered Shares is not less than the minimum number of shares to be purchased in
the Tender Offer (14,458,500 shares), the Offeror will purchase all of the Tendered Shares.
(II) Whether there are conditions for withdrawal of the Tender Offer, the details thereof, and how to disclose
any such withdrawal
If any circumstances set forth in Article 14, paragraph 1, item (i), (a) through (j), (m) through (t) anditem (iii), (a) through (h) and (j), item (iv), and Article 14, paragraph 2, items (iii) through (vi) of theOrder arise, the Offeror may withdraw the Tender Offer. Further, (i) if the organ which is responsible
for making decisions on execution of the operations of the Target makes a decision to pay dividends ofsurplus whose record date is prior to the date of commencement of settlement pertaining to the Tender
Offer (excluding those for which the amount of money and other assets to be delivered to shareholders
is expected to be less than the amount equivalent to 10% of the book value of the Target’s net assets on
its balance sheet as of the last day of its most recent business year (24,007 million yen (Note)), and (ii)
if the organ which is responsible for making decisions on execution of the operations of the Target makes
a decision to acquire treasury shares (excluding those for which the amount of money and other assets
to be delivered in exchange for the acquisition of shares is expected to be less than the amount equivalent
to 10% of the book value of the Target’s net assets on its balance sheet as of the last day of its most recent
business year (24,007 million yen)), since it is deemed that these cases fall under “matters equivalent tothose set forth in (a) through (s)” as set forth in Article 14, paragraph 1, item (i), (t) of the Order, theOfferor may withdraw the Tender Offer. In addition, “Facts equivalent to those set forth in (a) through(i)” as set forth in Article 14, paragraph 1, item (iii), (j) of the Order means cases where (i) it is found that153

a legal disclosure document submitted by the Target contains a false statement about a material particularor omits a statement as to a material particular that is required to be stated, with the Offeror being
unaware, or unable to become aware, of such false statement despite the exercise of due care, and (ii) thefacts set forth in (a) through (g) of the same item occur to a material subsidiary of the Target.
If the Offeror intends to withdraw the Tender Offer, it will make an electronic public notice and publish
a notice to that effect in the Nihon Keizai Shimbun. However, if it is difficult to make a public noticeby the last day of the Tender Offer Period, the Offeror will announce such withdrawal in the manner
stipulated in Article 20 of the Cabinet Office Order and give public notice immediately thereafter.
(Note) If there is no change in the total number of issued shares and the number of treasury shares, theamount of dividends per share will be equivalent to 240 yen (specifically, this amount iscalculated by dividing 24,007 million yen (rounded down to the nearest million yen), theamount equivalent to 10% of 240,073 million yen, which is the amount of net assets in theTarget’s non-consolidated financial statements as of February 28, 2023, as stated in the
Securities Report for the 48th fiscal year submitted by the Target on May 25, 2023, by the
number of shares calculated by deducting the number of treasury shares held by the Target on
February 29, 2024 as informed by the Target (222,085 shares) from the total number of issued
shares of the Target (100,300,000 shares) as of January 12, 2024 as stated in the Target Third
Quarterly Report (100,077,915 shares), and by rounding up fractions of less than one yen).
(III) Whether there are conditions to reduce the purchase price, the details thereof, and how to disclose any
such reduction
Under the provisions of Article 27-6, paragraph 1, item (i) of the Act, if the Target conducts any of theacts set forth in Article 13, paragraph 1 of the Order during the Tender Offer Period, the Offeror may
reduce the purchase price in accordance with the standards set forth in Article 19, paragraph 1 of the
Cabinet Office Order. If the Offeror intends to reduce the purchase price, it will make an electronic
public notice and publish a notice to that effect in the Nihon Keizai Shimbun. However, if it is difficult
to make a public notice by the last day of the Tender Offer Period, the Offeror will announce such
reduction in the manner stipulated in Article 20 of the Cabinet Office Order and give public notice
immediately thereafter. If the purchase price is reduced, the Offeror will also purchase the Tendered
Shares that were tendered on or before the date on which such public notice was made at the reduced
purchase price.
(IV) Matters concerning the Tendering Shareholders’ right to cancel their contracts
The Tendering Shareholders may cancel their contracts pertaining to the Tender Offer at any time
during the Tender Offer Period. If the Tendering Shareholders wish to cancel their contracts, they mustdeliver or send a document for cancellation of the contracts pertaining to the Tender Offer (“Cancellation
Notice”) to the head office or nationwide branch offices that accepted the tender applications by thetender offer agent below by 3:30 p.m. on the last day of the Tender Offer Period. However, in the caseof sending a Cancellation Notice, it must arrive by 3:30 p.m. on the last day of the Tender Offer Period.

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For cancellation of contracts applied for via an online service, the Tendering Shareholders must cancel
them by carrying out operations on the online service (https://hometrade.nomura.co.jp/) or by deliveringor sending a Cancellation Notice. In the case of carrying out operations on the online service, theTendering Shareholders must follow the instructions shown on the relevant screen to conduct theprocedures for cancellation by 3:30 p.m. on the last day of the Tender Offer Period. For cancellationof contracts applied for in transaction offices, the Tendering Shareholders may not cancel them bycarrying out operations on the online service. In the case of delivering or sending a Cancellation Notice,
the Tendering Shareholders must request a Cancellation Notice from the transaction office in advanceand deliver or send it to the transaction office by 3:30 p.m. on the last day of the Tender Offer Period.
However, in the case of sending a Cancellation Notice, it must arrive by 3:30 p.m. on the last day of theTender Offer Period.
Even if a contract is cancelled by the Tendering Shareholders, the Offeror will not claim damages or
payment of a penalty from the Tendering Shareholders. In addition, the costs required to return theTendered Shares will be borne by the Offeror. Upon receipt of a request for cancellation, the Offeror
will return the Tendered Shares in the manner stated in “(IV) Method of returning share certificates, etc.”
in “(8) Method of settlement” above promptly after completion of the procedures pertaining to suchcancellation request.
(V) Method of disclosure if terms of purchase are changed
During the Tender Offer Period, the Offeror may change the terms of purchase, except for cases
prohibited by Article 27-6, paragraph 1 of the Act and Article 13, paragraph 2 of the Order. If theOfferor intends to change the terms of purchase, it will make an electronic public notice of the details ofsuch change and publish a notice to that effect in the Nihon Keizai Shimbun. However, if it is difficult
to make a public notice by the last day of the Tender Offer Period, the Offeror will announce such change
in the manner stipulated in Article 20 of the Cabinet Office Order and give public notice immediately
thereafter. If the terms of purchase are changed, the Offeror will also purchase the Tendered Shares thatwere tendered on or before the date on which such public notice was made under the changed terms ofpurchase.
(VI) Method of disclosure if an amendment statement is submitted
If the Offeror submits an amendment statement to the Director-General of the Kanto Local Finance
Bureau (except for the cases set forth in the proviso to Article 27-8, paragraph 11 of the Act), the Offeror
will immediately announce the details of the amendment statement related to the details stated in the
public notice for commencement of the Tender Offer in the manner set forth in Article 20 of the Cabinet
Office Order. The Offeror will also immediately amend the explanatory statement of the Tender Offerand deliver the amended explanatory statement of the Tender Offer to the Tendering Shareholders towhom the explanatory statement of the Tender Offer has already been delivered. However, if the scopeof the amendment is limited, the amendment will be made by preparing a document stating the reason
for the amendment and the subject matter before and after the amendment, and by delivering the
document to the Tendering Shareholders.

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(VII) Method of disclosure of the results of the Tender Offer
The Offeror will announce the results of the Tender Offer on the day following the last day of theTender Offer Period in the manner stipulated in Article 9-4 of the Order and Article 30-2 of the Cabinet
Office Order.
(VIII) Others
The Offeror, in accordance with Article 27-2, paragraph 5 of the Act and Article 8, paragraph 5,
item (iii) of the Order, includes the American Depositary Receipts as a type of share certificates, etc. tobe purchased, because it is necessary to solicit applications for sales, etc. for all the share certificates, etc.
issued by the Target. On the other hand, while the American Depositary Receipts are securities issued
in the United States, it has been determined that it will be difficult for the Offeror, which is a resident ofJapan, to acquire the American Depositary Receipts themselves in the Tender Offer conducted outside
the United States because there are no financial instruments business operators, etc. that can handle theacquisition as a tender offer agent, in practice. Accordingly, in the Tender Offer, the Offeror will accept
tenders of the Target Shares and the Share Options only, and instead of accepting tenders of the American
Depositary Receipts themselves, it will accept tenders of the Target Shares related to such American
Depositary Shares represented by the American Depositary Receipts. Therefore, owners of theAmerican Depositary Receipts who wish to tender in the Tender Offer should deliver the American
Depositary Receipts to the Depositary Banks and receive delivery of the Target Shares related to such
American Depositary Shares represented by the American Depositary Receipts, in advance. According
to the American Depositary Receipts Notifications, one American Depositary Share is equivalent to onefourth of the Target Shares; therefore, in order to receive delivery of one Target Share, owners of theAmerican Depositary Receipts need to deliver American Depositary Receipts representing four
American Depositary Shares to the Depositary Banks. Owners of the American Depositary Receipts
can receive delivery of the Target Shares by submitting the American Depositary Receipts to the
Depositary Banks’s offices and paying fees, taxes, etc. as determined by the Depositary Banks.
This press release is intended to announce the Tender Offer and provide information relating to theTender Offer to the public and has not been prepared for the purpose of soliciting an offer to sell securities
or to make an offer to purchase securities pertaining to the Tender Offer. If shareholders and the Share
Option Holders wish to make an offer to sell their securities, they should first read the Tender Offer
Explanatory Statement concerning the Tender Offer and make an offer to sell their securities at their own
discretion. This press release shall neither be, nor constitute a part of, an offer to sell or purchase, or
solicitation to sell or purchase, any securities, and neither this press release (or 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 neither this press release (or any part of this press release) nor the distribution thereof may berelied upon at the time of entering into any such agreement.
The Tender Offer is for shares of the Target, a company incorporated in Japan. The Tender Offer
shall be implemented in compliance with the procedures and information disclosure standards prescribedby Japanese law, and these procedures and standards are not necessarily the same as the procedures andinformation disclosure standards in the United States. In particular, Section 13(e) or 14(d) of the U.S.

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Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”) and the rules andregulations thereunder do not apply to the Tender Offer, and the Tender Offer is not necessarily conductedconsistent with these procedures and standards. The financial information contained in this press
release and the documents referenced in this press release is based on Japanese accounting standards orinternational accounting standards, which may differ materially from generally accepted accounting
principles in the United States and other countries. Since the Offeror Related Parties and the Target arecorporations incorporated outside the United States and all or some of their directors and officers are notresidents of the United States, it may be difficult to exercise, make or enforce any right or claim arisingunder the U.S. federal securities laws. It may not be possible to commence legal proceedings against a
non-U.S. corporation and its directors and officers in a non-U.S. court for violations of U.S. securities
laws. In addition, U.S. courts are not necessarily granted jurisdiction over non-U.S. corporations and theirsubsidiaries and affiliates and 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 to the jurisdiction of aU.S. court.
Unless otherwise stated, all procedures relating to the Tender Offer shall be conducted in Japanese.
Although all or part of the documents relating to the Tender Offer may be prepared in English, if there isany discrepancy between the Japanese documents and the corresponding English documents, theJapanese documents shall prevail.
Statements in this press release and the documents referenced in this press release contain “forwardlooking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended(the “Securities Act”) and Section 21E of the Securities Exchange Act. Known and unknown risks,
uncertainties, and other factors could cause actual results to differ materially from the results implied or
expressly stated as “forward-looking statements”. None of the Offeror Related Parties, the Target nor
their respective affiliates gives any assurance or guarantee that the results implied or expressly stated bythese forward-looking statements will be achieved. The “forward-looking statements” contained in thispress release and the documents referenced in this press release have been prepared based upon theinformation available to the Offeror Related Parties as of the date of this press release, and unlessotherwise requires by applicable laws and regulations, none of the Offeror Related Parties nor any of
their respective affiliates assumes any obligation to change or revise the “forward-looking statements”
to reflect future events and circumstances.
The Offeror Related Parties, the Target, each of the financial advisors to the Offeror Related Parties
and the Target, and the tender offer agent (including the related parties thereof) may purchase or takeactions to purchase the Target Shares outside the Tender Offer prior to the commencement of the Tender
Offer or during the Tender Offer Period to the extent permitted under the Financial Instruments andExchange Related Laws and Regulations of Japan and other applicable laws and regulations and subject
to the requirements of Rule 14e-5(b) under the Securities Exchange Act. Such purchase may be
conducted at a market price through a market transaction or a price determined in off-market
negotiations. If the relevant information concerning such purchases is disclosed in Japan, it shall also
be disclosed in the United States by an equivalent method of disclosure.

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If a shareholder exercises the right to demand purchase of shares less than one unit pursuant to theCompanies Act, the Target may purchase its treasury shares during the Tender Offer Period in accordancewith statutory procedures.
(10) Notification date of commencement of the Tender Offer
March 28, 2024 (Thursday)(11) Tender offer agent
Nomura Securities Co., Ltd.

1-13-1 Nihonbashi, Chuo-ku, Tokyo

3.

Policies after the tender offer and future prospects
For the policies after the Tender Offer and future prospects, please refer to “(2) Background, purpose anddecision-making process leading to the decision to conduct the Tender Offer, and management policy following
the Tender Offer,” “(4) Policies on organizational restructuring, etc. after the Tender Offer (matters concerning“two-step acquisition”),” and “(5) Possibility of delisting and reason therefor” under “1. Purposes of Tender Offer”
above.
4.
Others(1)
Whether there are agreements between the Offeror Parties and the Target or its officers, and the details
thereof(I) Whether there are agreements between the Offeror Parties and the Target, and the details thereof(i) Expression of favor for the Tender Offer
According to the Target Press Release Dated February 6, 2024, the Target resolved at the board of directors’
meeting held on February 6, 2024, as the opinion of the Target at that time, (i) to express the Target’s opinion
in favor of the Tender Offer if the Tender Offer commences; (ii) to recommend that the shareholders of theTarget tender their shares in the Tender Offer; (iii) to recommend that the owners of the American Depositary
Receipts deliver the American Depositary Receipts to the Depositary Banks in advance and receive thedelivery of the Target Shares related to the American Depositary Shares represented by the relevant American
Depositary Receipts to tender their shares in the Tender Offer; and (iv) that the Target would leave the decision
as to whether or not to tender their shares in the Tender Offer to the judgement of the Share Option Holders.
Furthermore, according to the Target Press Release Dated March 27, 2024, at the board of directors’
meeting held today, the Target once again resolved to the effect that it shall express its opinion in favor of theTender Offer and recommend that the Target’s shareholders tender their shares in the Tender Offer, that itrecommends that holders of American Depositary Receipts tender in the Tender Offer by delivering their
American Depositary Receipts to the Depositary Bank in advance and receiving delivery of the Target Shares
related to such American Depositary Shares represented by the American Depositary Receipts, and that itleaves to the Share Option Holders the decision as to whether to tender in the Tender Offer.
(ii) Capital and Business Alliance Agreement
The Offeror has entered into the Capital and Business Alliance Agreement between MC and the Target asof February 6, 2024. For details of the Capital and Business Alliance Agreement, please refer to “(III)158

Capital and Business Alliance Agreement” under “(6) Material agreements relating to the Tender Offer” in“1. Purposes of Tender Offer.”(II) Background, purpose and decision-making process leading to the decision to conduct the Tender Offer,and management policy following the Tender Offer
Please refer to “(2) Background, purpose and decision-making process leading to the decision to conduct
the Tender Offer, and management policy following the Tender Offer” under “1. Purposes of Tender Offer.”(III) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender
Offer Price and measures to avoid conflicts of interest
Please refer to “(Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairnessof the Tender Offer Price and measures to avoid conflicts of interest)” under “(II) Background of calculation”
under “(4) Basis for calculation of the price of tender offer” under “2. Summary of Tender Offer.”(2)
Other information considered to be necessary for investors to determine whether to tender their sharesin the Tender Offer(I)
Announcement of “Notice of Revision of Year-End Dividend Forecast (No Distribution)”
According to the Target, the Target resolved at the board of directors’ meeting held on February 6, 2024
that it would revise the year-end dividend forecast for the fiscal year ending February 2024 and would not
pay dividends for the fiscal year ending February 2024. For details, please refer to “Notice of Revision ofYear-End Dividend Forecast (No Dividend)” announced on February 6, 2024 by the Target.
End

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[Regulation on solicitation]
This press release is intended to announce the Tender Offer and provide information relating to the Tender
Offer to the public and has not been prepared for the purpose of soliciting an offer to sell securities or to makean offer to purchase securities pertaining to the Tender Offer. If shareholders and the Share Option Holders
wish to make an offer to sell their securities, they should first read the Tender Offer Explanatory Statement
concerning the Tender Offer and make an offer to sell their securities at their own discretion. This press
release shall neither be, nor constitute a part of, an offer to sell or purchase, or a solicitation of an offer to sellor purchase, any securities, and neither this press release (or part of this press release) nor its distribution shallbe interpreted to constitute the basis of any agreement in relation to the Tender Offer, and neither this press
release (or any part of this press release) nor its distribution may be relied upon at the time of entering into any
such agreement.
[Forward-Looking Statements]
This press release and the documents referenced in this press release may contain expressions concerning
future prospects, including “expect,” “forecast,” “anticipate,” “intend,” “plan,” “be convinced,” “project” and“estimate.” These expressions are based on the current business prospects of the Offeror Related Parties or
the Target, as applicable, and they are subject to change depending on future circumstances and developments.
None of the Offeror Related Parties, the Target nor any of their respective affiliates assumes any obligation to
update these expressions concerning future prospects to reflect actual performance and other circumstancesand developments, and changes to the conditions, or other related factors.
[U.S. regulations]
The Tender Offer is for shares of the Target, a company incorporated in Japan. The Tender Offer shall be
implemented in compliance with the procedures and information disclosure standards prescribed by Japaneselaw, and these procedures and standards are not necessarily the same as the procedures and information
disclosure standards in the United States. In particular, Section 13(e) or 14(d) of the U.S. Securities Exchange
Act of 1934, as amended (the “Securities Exchange Act”) and the rules and regulations thereunder do not apply
to the Tender Offer, and the Tender Offer is not necessarily conducted consistent with these procedures andstandards. The financial information contained in this press release and the documents referenced in thispress release is based on Japanese accounting standards and international accounting standards, which may
differ materially from generally accepted accounting principles in the United States and other countries.
Since the Offeror Related Parties and the Target are corporations incorporated outside the United States andall or some of their directors and officers are not residents of the United States, it may be difficult to exercise,make or enforce any right or claim arising under the U.S. federal securities laws. It may not be possible tocommence legal proceedings against a non-U.S. corporation and its directors and officers in a non-U.S. court
for violations of U.S. securities laws. In addition, U.S. courts are not necessarily granted jurisdiction overnon-U.S. corporations and their subsidiaries and affiliates and there is no guarantee that shareholders will beable to compel a company outside the United States or its subsidiaries and affiliates to subject themselves tothe jurisdiction of a U.S. court.
Unless otherwise stated, all procedures relating to the Tender Offer shall be conducted in Japanese. Although
all or part of the documents relating to the Tender Offer may be prepared in English, if there is any discrepancy
between the Japanese documents and the corresponding English documents, the Japanese documents shallprevail.

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Statements in this press release and the documents referenced in this press release contain “forward-looking
statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the “SecuritiesAct”) and Section 21E of the Securities Exchange Act. Known and unknown risks, uncertainties, and otherfactors could cause actual results to differ materially from the results implied or expressly stated as “forwardlooking statements.” None of the Offeror Related Parties, the Target nor their respective affiliates gives any
assurance or guarantee that the results implied or expressly stated by these forward-looking statements will beachieved. The “forward-looking statements” contained in this press release and the documents referenced inthis press release have been prepared based upon the information in the possession of the Offeror Related
Parties as of the date of this press release, and unless otherwise required by applicable laws and regulations,none of the Offeror Related Parties, the Target nor any of their respective affiliates assumes any obligation tochange or revise the “forward-looking statements” to reflect future events and circumstances.
The Offeror Related Parties, the Target, each of the financial advisors to the Offeror Related Parties and theTarget, and the tender offer agent (including the related parties thereof) may purchase or take actions topurchase the Target Shares outside the Tender Offer prior to the commencement of the Tender Offer or during
the Tender Offer Period to the extent permitted under the Financial Instruments and Exchange Related Laws
and Regulations of Japan and other applicable laws and regulations and subject to the requirements of Rule
14e-5(b) under the Securities Exchange Act. Such purchase may be conducted at a market price through amarket transaction or a price determined in off-market negotiations. If the relevant information concerning
such purchases is disclosed in Japan, it shall also be disclosed in the United States by an equivalent method of
disclosure.
[Other countries]
The announcement, issuance, or distribution of this press release may be legally restricted in some countries
or territories. In such case, shareholders should be aware of and comply with such restriction. The
announcement, issue or distribution of this press release shall not be interpreted as an offer to purchase orsolicitation of an offer to sell share certificates concerning the Tender Offer, but simply as a distribution of
information.

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