Translation
February 6, 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 Planned Commencement of and Recommendation
to Tender in the Tender Offer for Company’s Share Certificates by KDDI Corporation and Notice ofCapital and Business Alliance
The Company hereby announces that, as described in “I. Opinion concerning the Tender Offer” below, regarding the tender
offer for the Company’s shares (the “Company Shares”), Share Options (as defined in “(2) Share options”, “2. Price of tender
offer” of “I. Opinion concerning the Tender Offer” below; hereinafter the same) and American Depositary Receipts (asdefined in “(3) Depositary receipts for share certificates”, “2. Price of tender offer” of “I. Opinion concerning the Tender
Offer” below; hereinafter the same) by KDDI Corporation (the “Offeror”) (the “Tender Offer”), the Company resolved at its
board of directors meeting held today, as the Company’s opinion as of today, to the effect that, if the Tender Offer iscommenced, 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 and the holders 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 sharecertificates”, “2. Price of tender offer” of “I. Opinion concerning the Tender Offer” below) in advance and receiving deliveryof the Company Shares related to the American Depositary Shares (as defined in “(3) Depositary receipts for sharecertificates”, “2. Price of tender offer” of “I. Opinion concerning the Tender Offer” below) represented on their American
Depositary Receipts, and (iii) leave the decision to the holders of Share Options (the “Share Option Holders”) whether or not
to tender in the Tender Offer.
In addition, the Company resolved at its board of directors meeting held today to enter into a capital and business allianceagreement with the Offeror and Mitsubishi Corporation (“MC”; the Offeror and MC collectively referred to as the “Offeror
Related Parties”) (the “Capital and Business Alliance Agreement”) as described in “II. Capital and Business AllianceAgreement” below.
With respect to the Tender Offer, based on the considerations to date, it is expected that a certain period of time is necessary
to complete the procedures and actions required under the competition laws (the “Competition Law Procedures”) of Japan,
China, South Korea, and the EU.

Accordingly, the Tender Offer is scheduled to be commenced promptly upon thesatisfaction (or waiver by the Offeror Related Parties) of the conditions precedent (Note 1) (the “Conditions Precedent”),
including the completion of the procedures and actions and other conditions precedent stipulated in the master agreement(the “Master Agreement”). As of today, based on discussions with local law firms regarding such procedures, etc., theOfferor aims to commence the Tender Offer in or around April 2024, but it is difficult to accurately predict the length of time1required for the procedures and actions with Japanese and foreign competition authorities. Any change in the expected timingof the commencement of Tender Offer will also be promptly announced.
Therefore, the Company resolved at the aforementioned board of directors meeting 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”, “(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”, “3. Details of, andgrounds and reasons for the opinion on the Tender Offer” of “I. Opinion concerning the Tender Offer”, the board of directors
meeting resolved to, request 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”, “(2) Grounds and reasons for the opinion on the Tender Offer”,“3. Details of, and grounds and reasons for the opinion on the Tender Offer” of “I. Opinion concerning the Tender Offer”
below; hereinafter the same) established by the Company in relation to the Tender Offer 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 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 based 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.
For information regarding the members and specific activities of the Special Committee, please refer to “(II) Establishmentof independent special committee at the Company and procurement of a report from the special committee”, “(6) Measures
to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures toavoid conflicts of interest”, “3. Details of, and grounds and reasons for the opinion on the Tender Offer” of “I. Opinion
concerning the Tender Offer” below.
The above resolution of the board of directors of the Company was 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 on organizational
restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)”, “3. Details of, and grounds and reasonsfor the opinion on the Tender Offer” of “I. Opinion concerning 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’ss hareholders in the Tender Offer and other material agreements relating to the Tender Offer” under “I. Opinion
concerning the Tender Offer” below) are all true and accurate 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 theTender Offer” under “3. Details of, and grounds and reasons for, the opinion on the Tender Offer” under “I. Opinion
concerning 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, which was established in connection with the Tender Offer, has made areport to the Company’s board of directors that it is appropriate to express the Opinion in Favor of Tender Offer andsuch report has been made public, and the report is maintained; (V) all Competition Law Procedures and other2

procedures with relevant authorities necessary for the implementation of the Transactions (as defined in“(I) Outlineof the Tender Offer” under “(2) Grounds and reasons for the opinion on the Tender Offer” under “3. Details of, andgrounds and reasons for, the opinion on the Tender Offer” under “I. Opinion concerning 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 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 areno 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 are no facts regarding the implementation of the tender offer,etc. (Article 167, paragraph 2 of the Act) with respect to the Company’s Share Certificates (as defined in “(I) Outlineof the Tender Offer” under “(2) Grounds and reasons for the opinion on the Tender Offer” under “3. Details of, andgrounds and reasons for, the opinion on the Tender Offer” under “I. Opinion concerning the Tender Offer” below)that have not been disclosed (Article 167, paragraph 4 of the Act); (VIII) from today onward, any event that may havea material adverse effect on the business, financial condition, operating results, or cash flows, or the prospects thereofof 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 the opinion on the Tender
Offer” under “3. Details of, and grounds and reasons for, the opinion on the Tender Offer” under “I. Opinion
concerning the Tender Offer” below), or any other situation that may make it difficult to achieve the purpose of theTransactions has not occurred or 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
I. Opinion concerning the Tender Offer
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

3

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.)(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 parties(9)of

Not applicable.

Consolidated financial position and consolidated management performance for the last three years(IFRS)

Accounting period

Year ending March 31, 2021

Year ending March 31, 2022

Year ending March 31, 2023

Total equity

5,259,469 million yen

5,510,663 million yen

5,670,659 million yen

Total assets

10,535,326 million yen

11,084,379 million yen

11,923,522 million yen

2,091.82 yen

2,249.27 yen

2,377.38 yen

Sales

5,312,599 million yen

5,446,708 million yen

5,671,762 million yen

Operating income

1,037,395 million yen

1,060,592 million yen

1,077,393 million yen

1,038,056 million yen

1,064,497 million yen

1,079,523 million yen

651,496 million yen

672,486 million yen

679,113 million yen

284.16 yen

300.03 yen

311.01 yen

120.00 yen

125.00 yen

135.00 yen

Equityattributabletoowners of the parent per
share

Current income before
tax
Current

incomeattributable to owners of
the parent
Basic current income per
share
Dividend per share(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(100,184,370 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, plus4

106,000 Company Shares, to be issued upon exercise of 1,060 Share Options reported by the Company as remaining
as of December 31, 2023 (Note 3), minus the number of treasury shares held by the Company as of December 31,
2023 described in 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”) (221,630
shares). For the avoidance of doubt,the Shareholding Ratio calculated based on the latest information available
before the commencement of the Tender Offer may differ from the above figure due to changes after that dates(hereinafter the same).
(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; hereinafter the same).
Name of Share Options

Number of Share Options as of

Number of Company Shares to be

December 31, 2023 (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)(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

5

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 be
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 today, as the Company’s opinion as of today, to the effect6

that, if the Tender Offer is commenced, 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 holders 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 tenderin the Tender Offer.
As stated above, the Offeror intends to promptly conduct the Tender Offer once the Conditions Precedent are satisfied(or waived by the Offeror Related Parties). As of today, the Offeror aims to commence the Tender Offer in around April
2024. However, as it is difficult to accurately predict the period required for the procedures to be taken by the competition
authorities in and outside Japan, the aforementioned board of directors meeting resolved the following procedures forexpressing the Company’s opinion. That is, as described in “(II) Establishment of independent special committee at theCompany and procurement of a report from the special committee” of “(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, 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 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 based on such opinion of the Special
Committee, the board of directors of the Company will restate its opinion on the Tender Offer when the Tender Offer iscommenced.
The above resolution of the board of directors of the Company 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 auditors of theCompany that they have no objection” of “(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.
(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%). Today, the Offeror has entered 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%),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 thetreasury shares owned by the Company) and Share Options (the “Company’s Share Certificates”). In addition, theCapital and Business Alliance Agreement has been executed today between the Offeror Related Parties, and theCompany. For details of the Capital and Business Alliance Agreement, please refer to “II. Capital and Business
Alliance Agreement” below.
The Offeror will conduct the Tender Offer as part of the Transactions provided that the Conditions Precedent aresatisfied (or waived by the Offeror Related Parties). As of today, the Offeror is not aware of any event of material

7impediment to the satisfaction of the Conditions Precedent. The Offeror, together with MC, will implement theprocedures and actions required under the competition laws of Japan, China, South Korea, and the EU to satisfy theConditions Precedent, based on the legal advice of local law firms in Japan and in the relevant foreign jurisdictions.
The Offeror Related Parties are already making the necessary advance preparations for such procedures and actions,and from today, will consult with the relevant authorities concerning competition law to ensure that such procedures
and actions can be implemented.
The Offeror has set the minimum number of tendered shares to be purchased in the Tender Offer at 14,458,800 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 (14,458,800 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, 1,000,783, in respect of the number of shares (100,078,370 shares) which isthe number of shares calculated by deducting the number of treasury shares held by the Company as of November 30,
2023, as stated in the Company’s Financial Results (221,630 shares) from the total number of issued shares(100,300,000 shares) as of January 12, 2024 as stated in the Company’s Third Quarterly Report). Due to changes in
the number of treasury shares held by the Company after relevant time of the information, the actual minimum numberof tendered shares to be purchased in the Tender Offer may differ from the above figure. Prior to the commencementof the Tender Offer, the Offeror plans to determine the definitive minimum number of tendered shares to be purchased
based on the latest information available at the time of the commencement of the Tender Offer.
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, to8

implement a series of procedures to make the Offeror Related Parties the Company’s only shareholders (the “Squeezeout Procedure”). The Offeror plans to use cash on hand and/or borrowings from financial institutions, etc., to fund theTender 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)
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 47,818,270 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

9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,
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.

10

MC

Offeror50.00%

50.00%

Company

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 today, as the Company’s opinion asof today, 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 theholders 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 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.
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

11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,
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) with MC in February 2000, the Company 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 Happiness and Harmony in Our
Communities” in the medium-term management vision “Challenge 2025” formulated in FY 2021 in preparation for2025, the 50th anniversary of the Company’s incorporation, focusing its efforts on creating “new hubs of refreshment inevery 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 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:

12

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 todevelop 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 the13

new, 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
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

14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
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

15

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 andin use of plastic, and the Company

recognizes the intensifying environmental changes including climate change as a business challenge that must be
addressed with priority.
(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
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 digital16

technology 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 theretail 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,17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
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.

18

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 theTransactions (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,

19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 new
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, the20Offeror 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.
In parallel, the Offeror and MC have repeatedly held consultations with the Company since mid-October 2023 until
today, on a specific business alliance, such as the management structure and business policies following the completionof the Transactions. After several rounds of negotiations, as of today, the Offeror Related Parties and the Company
executed the Capital and Business Alliance Agreement, and the Shareholders Agreement has been executed with theOfferor Related Parties.

For a summary of the Capital and Business Alliance Agreement and the Shareholders

Agreement, refer to “II. 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 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 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

21

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
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

22

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 theCompany’s Financial Results and the continuous rise in the current stock price with a view to recommending support forand 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 theCompany 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.

23

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 agree today to set the Tender Offer Price per Company Share at 10,360 yen, set the Share Option Price at 1 yen, andset the Tender Offer Price per Company Share relating to American Depositary Shares represented by American
Depositary Receipts at 10,360 yen.
(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 today, where they agreed that, as directors of theCompany after completion of the Transactions, MC and the Offeror will each appoint three directors, and MC and theOfferor 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 othermaterial 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

24

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 system
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 outside25

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 holders 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 fairnessof 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 Commitee. 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, the26Company 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 Committee
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 today. For asummary of the Capital and Business Alliance Agreement, refer to “II. Capital and Business Alliance Agreement” 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 the effectiveness 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 January27

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.
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”) from the Special Committee 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 the Transactions (including the offer
price in the Tender Offer) are ensured; (c) sufficient consideration has been given to the interests of the shareholders of
the Company through fair procedures in the Transactions; (d) it is appropriate for the 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 theTender Offer, that it recommends that the holders of American Depositary Receipts in respect of the Company Sharestender in the Tender Offer by delivering their American Depositary Receipts to the depositary bank in advance andreceiving 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 thetender offer in respect of the share options; and (e) in addition to (a) through (d) above, the decision to enter into theTransactions would not be disadvantageous to the minority shareholders of the Company (for a summary of the Report,
refer to “(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).
(ⅲ) Details of the Company’s decision-making
In light of the circumstances described above, the Company, at its board of directors meeting held today, has carefully
considered and discussed whether the Transactions, including the Tender Offer, will contribute to the enhancement of
the Company’s corporate value, and whether the terms and conditions of the Transactions, including the Tender Offer28

Price, are reasonable, with reference to the legal advice received from Anderson Mori & Tomotsune, and the advice
received from SMBC Nikko Securities and the share valuation report on the valuation of the Company Shares that 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.
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 diversificationof 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 today that the best way to enhance the Company’s corporate value is toaccelerate 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 theCompany'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 in theenvironment.
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

29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'
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 the30

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, andcontinuously 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 Companys 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
FY 2018), 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 achive 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.

31

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 beacquired 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 20 business days (note), which is the shortest periodrequired by law 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 their shares in the Tender Offer and the opportunity

32

for a person other than the Offeror to purchase the Company Shares are ensured;(Note) The Tender Offer Period will be the minimum number of days required for a tender offer period under
U.S. securities laws, which is 20 business days in the United States. The same applies to the descriptionof the business days of the Tender Offer Period hereafter.
(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 ensuredso as not tobe 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 obtained from the Special Committee that the fairness and appropriateness of the terms andconditions of the Transaction (including the Tender Offer Price) are ensured as described in “(II)Establishment of independent special committee at the Company and procurement of a report from thespecial committee” under “(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.”

Based on the foregoing, the Company resolved as the Company’s opinion at this time, 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 holders of the American Depositary
Receipts tender in the Tender Offer by delivering their American Depositary Receipts to the Depositary Bank in advanceand 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.
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 the33

Tender 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 Company or the Offeror
Related Parties 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 stipulated 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) otherdepartments therein and Sumitomo Mitsui Banking Corporation, that the Company and SMBC Nikko Securities
conduct transactions on the same terms and conditions as their general trading partners, thereby the
independence as a financial advisor and third-party valuator is ensured, that SMBC Nikko Securities does notconstitute 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 theCompany 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 theindependence and expertise of SMBC Nikko Securities, and approved SMBC Nikko Securities as a financial
advisor and third-party valuator of the Company. The Company has not obtained an opinion concerning thefairness of the Tender Offer Price (fairness opinion) from SMBC Nikko Securities, as the Company has
determined that measures to ensure the fairness of the Tender Offer Price and measures to avoid conflicts ofinterest have been taken 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 Share
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 Share34

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
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

35

(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 Company or the Offeror Related Parties 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.
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 per36

share 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 fisical 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 Paties 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 circiumstances 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
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 present 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 the business plan,
financial forecast or other forward-looking information provided to it. In expressing its opinion contained in37the Fairness Opinion and conducting analysis underlying therein, Daiwa Securities placed a number ofassumptions 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 rights
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 of38

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.
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

39

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 this time.
(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, theTransaction (including, without limitation, the manner or structure of the Transaction or otherelements) or (b) the relative advantage of the Transaction compared with other strategies ortransactions that may be adopted or implemented by the Offeror, or business decision-making
related to promoting or implementing the Transaction. 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 Transaction. The Share Valuation Report (UBS Securities) does
not express any opinion on the price at which the Company 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 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 Valuation40

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), 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 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 the41

analysis 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 theTransaction; (iii) not conducted any legal, tax, accounting, or other analysis in respect of theTransaction, 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 Transaction, 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 Transaction.
UBS Securities is acting as financial advisor of the Offeror in connection with the Transaction andreceives remuneration for its services as financial advisor, and such remuneration becomes payablesubject to the successful completion of the Transaction. 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 theTender 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 as of today.
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.

42

(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
Considering that the American Depositary Receipts represent the American Depositary Shares deposited with
Depositary Banks, and one American Depositary Shares is equivalent to one Company Share, the price of the tender
offer of the American Depositary Receipts is set at 10,360 yen per share of the American Depositary Shares, which isthe same price as the Tender Offer Price per share of the Company Shares.
(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).
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

43

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 Depositary
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

44

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 today, to set the Tender Offer Price per Company Share at 10,360 yen, theShare 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.
(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 adviosr by the Company;(iv) Procurement of a share valuation report from an independent financial advisor and third-party valuatorretained by the Company;(v) Advice from an independent legal adviosr 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

45

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
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

46

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 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 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 the Offeror Related Parties, andin light of the fact that the Transaction, 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 Transaction, securing the fairness, transparency, and objectivity of the decision-making
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 Tender47

Offer, which in turn might not serve the interests of minority shareholders who wish to tender in the Tender Offer, andit 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) below, the Offeror believes that due consideration
was given to the interests of the Company’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 to
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 Transaction 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 theTransaction that the Company has received the initial proposal on the Transaction(Initial Proposal) and that, since the Transaction is a transaction that has structural conflict of interest issues andinformation asymmetry issues with minority shareholders, in considering and negotiating the Transaction, it is necessary
to take sufficient measures to ensure the fairness of the terms and conditions of the Transactions, including theestablishment of the special committee. In parallel, the Company also considered the candidates for the members of
the Special Committee, with advice from Anderson Mori & Tomotsune. After confirming that the candidates for themembers 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 Transaction,
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.)48

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 theTransaction, and may retain a third-party institution, etc. to conduct the valuation of the Company’s shares, the provisionof the fairness opinion with respect to the Transaction and other matters that the special committee deems necessary, andin such case, the Company shall bear the reasonable costs of such service, (b) that the decision of the Company’s boardof directors regarding the Transaction shall be made with the utmost respect for the judgment of the special committee,
and in particular, if the special committee determines that the terms and conditions of the Transaction are not appropriate,
the Company’s board of directors shall not opine in favor of the Transaction under such terms and conditions, (c) thatthe special committee shall be authorized to request the Company’s directors, employees, and other persons deemednecessary by the special committee to attend special committee meetings and request explanations of necessary
information in order to ensure the committee’s appropriate decisions, and (d) that the special committee shall beauthorized to be in substance involved in the process of negotiations concerning the terms and conditions of theTransaction by confirming in advance the Company’s plan on negotiation concerning the terms and conditions of theTransaction, 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
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 Transaction. 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 Transaction 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 Transaction, 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 Transaction including the Tender49

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 Transaction 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 Transaction(including the scope of the Company’s directors, officers and employees involved in the consideration, negotiation, anddecision-making regarding the Transaction and their duties) that the Company has established internally as described in“(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 theTransaction, 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 the Transaction
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 of interviews with
the Offeror Related Parties about the purpose and background of the Transaction, the management policy after theTransaction, 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 suchvaluation 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 Transaction 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 Transaction 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 this press release 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 Decision50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 as of February 5, 2024.
(a)

Details of the report
1. It is considered that the Transaction 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 Transaction (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 Transaction.
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 Transaction would not be disadvantageous tothe minority shareholders of the Company.

(b)

Reasons for report
1. Opinions to Matters for Consultation (i) (whether the purpose of the Transaction is justified and reasonable(including whether the Transaction 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 theTransaction will contribute to the enhancement of the Company’s corporate value and the purpose of theTransaction is justified and reasonable.
A. The Company’s projected synergies
It was explained that the following points could be expected as synergies from the Transaction:(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 Transaction is expected to accelerate the transformation to “Real x Tech Convenience” by making
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 the dispatchof human resources such as engineers from the Offeror, and strengthening the digital marketing system
by utilizing the Offeror’s customer base and big data of high-resolution location information that only
a telecommunications carrier can provide.
(II) Strengthening profitability by sharing the customer base･ The Transaction is expected to leverage the Offeror Group’s customer base of about 31 million
customers and promote high-resolution marketing initiatives.

51

･ 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 Transaction is 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 humanresources 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 Transaction 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.

52

･ 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 Transaction 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 Transaction interms 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 Transaction as it did to the Company, in order to confirm whether there was any discrepancy inunderstanding between the parties to the Transaction.
･ 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
this press release, no discrepancy was found between the Company’s understanding regarding thesynergies expected from the Transaction.
2. Opinions to Matters for Consultation (iii) (whether sufficient consideration is given to the interests of theshareholders of the Company through fair procedures in the Transaction)
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 Transaction:
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,

53

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 Transaction
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 Transaction 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 Transaction 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 Transaction to beinappropriate, then the board of directors of the Company shall not approve the Transaction 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
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 Transaction 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 Transaction 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, which54

is 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 Transaction, 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 that the Tender Offer period is scheduled to be set at 20business days, which is the shortest
period required by law. The Tender Offer is a so-called pre-announcement type tender offer, and it isalso stated that a relatively long period of time is secured before the commencement of the Tender Offer.
Considering such period, there is a reasonable opportunity for other potential acquirers to make acounter 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 Transaction.
F. Enhancement of information provision to general shareholders and improvement of transparency ofthe process･ In this press release, certain details regarding the Business Plan have been disclosed which was used asa basis for the valuation by DCF Method in Share Valuation Report (SMBC Nikko Securities) and Share
Valuation Report (Daiwa Securities).

55

･ 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 this press release.
G. Elimination of coerciveness･ The Squeeze-out Procedure in the Transaction 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 this press release.
･ This press release also states that the Squeeze-out Procedure will be conducted promptly after theclosing of the Tender Offer and that, with respect to the money to be delivered 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 theOfferor Related Parties).
･ Based on the above, it is acknowledged that measures to eliminate coercion are being taken with regard
to the Transaction.
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 eachmeeting.
･ 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 Transaction with the aim of making the terms andconditions of the Transaction as favorable as possible to the general shareholders.
･ In light of the above, it can be inferred that the agreement reached in the Transaction 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.

56

･ 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.
･ 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.
･ Therefore, in terms of the comparison of the premium level of the Tender Offer Price with such othercases, the premium level of the Tender Offer Price is considered that although it is lower than the averageand median value based on the closing price of the previous day and the average closing price of thepast month of the previous day, it exeedss the average and median price of eleven deals of 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 whose target stockis over PBR 1 times from before the announcement of the transaction, based on the average closing
price for the past three months and six months.
C. Reasonableness of the scheme･ The scheme of the Transaction, in which the Offeor acquires all of the Company Shares (including theAmerican 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 the Company's
minority shareholders are given the opportunity to recoup their investment by acquiring all of theCompany's Share Certificates , is appropriate.

57

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 this press release, at the time of publication of the Tender Offer, the Company intends tomake a statement to the Share Option Holders that it will leave it to their judgement whether or not totender 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 tendertheir 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 Transaction 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 Transaction, 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.
(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 Transaction, various
procedures of the Transaction, and the method and process of the Company’s decision-making regarding the Transaction.
Anderson Mori & Tomotsune does not constitute a related party of the Offeror Related Parties and the Company andhas no material interest in the Transaction including the Tender Offer. The Company has a legal advisory agreement withAnderson 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 toreceive legal advice on a case-by-case basis based on the field and expertise required. The independence of the firm from58

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 Transaction, 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 problem 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 Transaction 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 is unsuccessful, the Company has determined that theinclusion of a performance fee to be paid on the condition that the Tender Offer is successfuldoes 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 the Transaction,
various procedures of the Transaction, and the method and process of the Company’s decision-making regarding theTransaction.
Nakamura, Tsunoda & Matsumoto does not constitute a related party of the Offeror Related Parties and the Company
and has no material interest in the Transaction 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 theTransaction, 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
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 of59

February 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 Transaction from the standpoint of being
independent from the Offeror Related Parties, considering that the Transaction 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 Transaction (Initial Proposal) from theOfferor Related Parties, the Company established a project team to consider the Transaction (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 Transaction 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 Transaction, including the Tender Offer, will contribute to theenhancement of the Company’s corporate value and whether the terms and conditions of the Transaction, 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.
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,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.

60

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 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 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 Transaction. 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 Transaction 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 the Company’s decision-making in the Transaction, and hehas participated in the deliberations and resolution at the above meeting of the Company’s board of directors.
As described above, the Offeror intends to promptly conduct the Tender Offer once the Conditions Precedent aresatisfied (or waived by the Offeror Related Parties). As of today, the Offeror aims to commence the Tender Offer inaround April 2024. However, as it is difficult to accurately predict the period required for the procedures to be taken by
the competition authorities in and outside Japan, the Company resolved at the board of directors meeting held today to,when the Tender Offer is commenced, request the Special Committee to consider whether or not the opinion expressed by
the Special Committee to the Company’s board of directors as of February 5, 2024 has changed, and if it has not , to informthe Company’s board of the directors to that effect, and if it has changed, to state its changed opinion, and also resolved
that, based on such opinion of the Special Committee, the board of the directos of the Company will restate its opinion on
the Tender Offer when the Tender Offer is commenced.
(IX) Establishment of measures to ensure purchase opportunities from other purchasers
Since the Offeror aims to commence the Tender Offer in around April 2024 and there is a substantial period 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 Transaction, 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 Transaction (including theexercise or non-exercise of voting rights at the Company's general shareholders meetings that are inconsistent with orconflict with the Transaction). 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 Offer61

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
The Company executed the Capital and Business Alliance Agreement with the Offeror Related Parties as of today.
For a summary, etc. of the Capital and Business Alliance Agreement, please refer to “II. Capital and Business AllianceAgreement” below.
(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 Transaction with MC as of today. A summary of the Master Agreement is understood 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 that62

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
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 Transaction, (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.

63

(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 theDefinitive 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 today, with respect to such matters as the joint operation of theLawson Group. A summary of the Shareholders Agreement is as follows. Except for certain provisions such as
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 Transaction

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 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 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 of64

headhunting of the Company Group employees, etc., and (D) the obligation to provide information on the
Company Group, etc.
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 Transaction, 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 of65

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
approved the Transaction as of today, the Company believes that these measures conform to the above 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 Transaction 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.
11. Others(1) Announcement of “Notice of Revision of the Year-End Dividend Forecast for the Fiscal Year Ending February 2024 (NoDistribution)
At the board of directors’ meeting of the Company held today, 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 Year Ending February 2024
(No Dividend)” announced as of today by the Company.
II. Capital and Business Alliance Agreement
The Company executed the Capital and Business Alliance Agreement with the Offeror Related Parties as of today. A
summary, etc. of the Capital and Business Alliance Agreement is as follows.
1. Reasons for executing the Capital and Business Alliance Agreement
Please refer to “(II) Background, purposes and decision-making process leading to the Offeror Related Parties’ decision
to conduct the Tender Offer” and “(III) Management policy after the Tender Offer” in “(2) Grounds and reasons for theopinion on the Tender Offer” in “3. Details of, and grounds and reasons for the opinion on the Tender Offer” in “I. Opinion
concerning the Tender Offer” above.
2. Details, etc. of the alliance
The details of the Capital and Business Alliance Agreement are 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 Japan66

・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 Transaction (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
corporate value, and operate the Company with the aim of “improving Life Time Value for consumers” and “affluent
Japanese communities” (The provision becomes effective on the closing date.)
・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

67

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 holding company takemeasures to tender all Company Shares held by each holding company of the Lawson Group in the Tender Offer andmeasures 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.)
3.Number of shares to be newly acquired by the counterparty and its ratio to shares outstanding
Please refer to “(I) Outline of the Tender Offer” in “(2) Grounds and reasons for the opinion on the Tender Offer” in“Details of, and grounds and reasons for the opinion on the Tender Offer” in “I. Opinion concerning the Tender Offer”
above.
4. Overview of the partner of the alliance
For an overview of the Offeror, please refer to “1. Overview of the Offeror” in “I Opinion concerning the Tender Offer”
above.
A summary of MC is as follows.
(1)

Name

Mitsubishi Corporation(2)

Address

Marunouchi 2-3-1, Chiyoda-ku, Tokyo(3)

Title/name
representative

(4)

of

Representative Director, President and Chief Executive Officer Katsuya
Nakanishi
MC is a company that is developing business jointly with bases inapproximately 90 countries and regions around the world and approximately
1,700 consolidated business companies. Also, it has a system with 10 groups(natural gas, industrial materials, oil and chemicals solution, mineral resources,

Details of businessindustrial infrastructure, automotive & mobility, food industry, consumer
industry, power solutions, and urban development) as well as the industry DX
department; and it has broad industries as its business fields, and is promoting
DX (digital transformation) and EX (energy transformation) to address
digitalization and a low or decarbonized society collectively as measures forimportant issues for the future.

(5)

Stated capital

204,447 million yen (as of September 30, 2023)(6)

Date of establishment

April 1, 1950 (founded on July 1, 1954)

68

(7)

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

14.84%EUROCLEAR BANK S.A./N.V. (standing proxy: Transaction

9.22%

Services Division, MUFG Bank, Ltd.)

Major shareholders andCustody Bank of Japan, Ltd. (trust account)

5.46%

Meiji Yasuda Life Insurance Company

4.16%

Tokio Marine & Nichido Fire Insurance Co., Ltd.

2.88%

The Master Trust Bank of Japan, Ltd. (employee pension trust

2.30%

account/voting trustee exercise type)shareholding ratio(as of September 30,

STATE STREET BANK WEST CLIENT - TREATY 505234

1.60%(standing proxy: Settlement & Clearing Services Department,

2023) (Note)

Mizuho Bank, Ltd.)The Master Trust Bank of Japan, Ltd. (employee pension trust

1.26%

account/Mitsubishi Electric Corporation account)
JP MORGAN CHASE BANK 385781 (standing proxy: Settlement

1.09%& Clearing Services Department, Mizuho Bank, Ltd.)JP Morgan Securities Japan Co., Ltd.
(8)

1.07%

Relationship between the Company and MC
As of today, MC holds 50,150,100 Company Shares (Shareholding Ratio:

Capital relationship50.06%).
One out of five directors of the Company holds the position of the Executive
Vice President of MC. Also, the Company has accepted secondment of 40

Personal relationshipemployees (as of January 12, 2024) from MC.
MC has executed the Business Alliance Agreement with the Company tocollaborate in the Company’s domestic convenience store business, overseas
Business relationshipconvenience store business and other peripheral businesses.
Mitsubishi Shokuhin Co., Ltd., a subsidiary of MC, sells products to the directly
managed stores and the affiliated stores operated by the Company.

Applicablestatusrelated parties(9)of

MC is the parent company of the Company.

Consolidated financial position and consolidated business performance for the last three years (IFRS)

Accounting period

Fiscal year ending March 31,

Fiscal year ending March 31,

Fiscal year ending March 31,

2021

2022

2023

Total assets

18,634,971 million yen

21,912,012 million yen

22,152,882 million yen

Total stated capital

6,538,390 million yen

7,857,172 million yen

9,124,417 million yen

3,803.01 yen

4,659.68 yen

5,648.84 yen

Revenue

12,884,521 million yen

17,264,828 million yen

21,571,973 million yen

Income before tax

253,527 million yen

1,293,116 million yen

1,680,631 million yen

Current net income

132,241 million yen

1,004,459 million yen

1,271,499 million yen

Equity interests
attributable to owners of
the parent per share69

Current net income
attributable to owners of

172,550 million yen

937,529 million yen

1,180,694 million yen

116.86 yen

635.06 yen

809.29 yen

116.57 yen

625.73 yen

805.69 yen

134 yen

150 yen180 yenthe parent
Current basic net income
per share
Net income per diluted
share
Dividend per share(Note) The description of shareholding ratio in “(7) Major shareholders and shareholding ratio (as of September 30, 2023)”
is quoted from “Status of Largest Shareholders” in Second Quarter of the Fiscal Year Ending September 30, 2023
submitted by MC on November 13, 2023.
5. Schedule of alliance
Date of resolution of board of directors

February 6, 2024

Date of execution date of the Capital and BusinessFebruary 6, 2024

Alliance Agreement
Date of commencement of the Tender Offer

Around April 2024 (scheduled)

Date of share consolidation

Around 8 2024 (scheduled)

Date of commencement of business alliance

Around 9 2024 (scheduled)

6. Future prospects
For future prospects, please refer to “(III) Management policy after the Tender Offer” in “(2) Grounds and reasons forthe 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 andreasons for the opinion on the Tender Offer” in “I. Opinion concerning the Tender Offer” above.
7. Transactions, etc. with controlling shareholders(1) Applicability of transactions with controlling shareholders and status of compliance with the Policy Concerning Measures
to Protect Minority Shareholders
The Company executed the Capital and Business Alliance Agreement as of today between MC, the controllingshareholder (parent company) of the Company, and the Offeror as a part of the Transaction.
In accordance with 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 (For the details,
please refer to “10 Transactions with controlling shareholders” in “I. Opinion concerning the Tender Offer” above.),upon negotiating and executing the Capital and Business Alliance Agreement, the Company has taken the measures toensure the fairness and measures to avoid conflicts of interest. Also, since the regular “special committee” reported
that it approved the Transaction as of today, the Company believes that these measures conform to the above 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” in “I. Opinion concerning the Tender Offer” above.

70

(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” in “I. Opinion concerning the Tender Offer” above, the Company procured fromthe Special Committee the Report to the effect that the decision to carry out the Transaction is not deemed as
disadvantageous to the Company’s minority shareholders as of February 5, 2024, which is independent of both theOfferor Related Parties and the Company.
End(Reference)“Notice Regarding Planned Commencement of Tender Offer for Shares of Lawson, Inc. (Securities Code: 2651) andthe Execution of the Capital and Business Alliance Agreement” dated February 6, 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 andother 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 respective71

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.

72

[Translation]
February 6 (as amended on Feb 7), 2024
To whom it may concern:
Company Name:KDDI Corporation

Name of Representative:

Makoto Takahashi
President, Representative Director, CEO(Securities Code: 9433 TSE Prime Market)

Contact:

Yasuo Nakazato, General Manager ofGeneral Administration Division,
Corporate Sector(TEL．03-3347-0077)

Notice Regarding Planned Commencement of Tender Offer for Shares of Lawson, Inc. (Securities Code: 2651) andthe Execution of the Capital and Business Alliance Agreement
KDDI Corporation (the “Offeror”) hereby announces that today, the Offeror has resolved to enter into with Mitsubishi
Corporation (“MC”; the Offeror and MC collectively referred to as the “Offeror Related Parties”) a master agreement
stipulating that the Offeror will acquire the share certificates, etc. of Lawson, Inc. (Securities Code: 2651, a company listedon the Prime Market of Tokyo Stock Exchange, Inc. (the “TSE”); 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 (the “Capital and Business Alliance Agreement”) with MC andthe Target (the “Capital and Business Alliance Agreement”).
With respect to the Tender Offer, based on the considerations to date, it is expected that a certain period of time is necessary
to complete the procedures and actions required under the competition laws (the “Competition Law Procedures”) of Japan,
China, South Korea, and the EU.

Accordingly, the Tender Offer is scheduled to be commenced promptly upon thesatisfaction (or waiver by the Offeror Related Parties) of the conditions precedent (Note 1) (the “Conditions Precedent”),
including the completion of the procedures and actions and other conditions precedent stipulated in the Master Agreement.
As of today, based on discussions with local law firms regarding such procedures, etc., the Offeror aims to commence theTender Offer in or around April 2024, but it is difficult to accurately predict the length of time required for the procedures andactions with Japanese and foreign competition authorities. If there is any change in the expected schedule of the Tender Offer,
it will be promptly announced.
(Note 1) Under the Master Agreement, the commencement of the Tender Offer by the Offeror is subject to the satisfaction(I) the representations and warranties made by the Offeror Related Parties (for details of such representations andwarranties, please refer to “(I) Master Agreement” under “(6) Material agreements relating to the Tender Offer”
under “1. Purposes of Tender Offer” below) are all true and accurate in all material respects; (II) all of the Definitive
Agreements (as defined in “(1) Outline of the Tender Offer” under “1. Purposes of Tender Offer” below; hereinafter73

the same) have been validly and lawfully executed and remain valid, and all obligations to be fulfilled or compliedwith 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, and theOpinion in Favor of Tender Offer has been made is made public and it is maintained; (IV) the Special Committee(as defined in “(i) Background of the proposal by the Offeror Related Parties and establishment of a review system”
under “(II) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by theTarget” under “(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” below; hereinafter
the same), which was established in connection with the Tender Offer, has made 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 (as defined in “(1) Outline of the Tender Offer” under “1.
Purposes of 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
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 Target’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 regarding the implementation of the tender offer, etc. (Article 167, paragraph 2 of the Act) with respect
to the Target’s Share Certificates (as defined in “(1) Outline of the Tender Offer” under “1. Purposes of Tender
Offer” below; hereinafter the same) that have not been disclosed (Article 167, paragraph 4 of the Act); (VIII) fromtoday onward, any event that 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 anddecision-making process leading to the decision to conduct the Tender Offer, and management policy following
the Tender Offer” under “1. Purposes of Tender Offer” below; hereinafter the same), or any other situation that
may make it difficult to achieve the purpose of the Transactions has not occurred or become apparent or is notreasonably 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 occurredor become apparent or are not reasonably expected to occur or become apparent.
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”), theOfferor owns 2,110,000 shares (Shareholding Ratio (Note 1): 2.11%).
(Note 1) “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 Target Shares to the number of shares (100,184,370
shares) (the “Total Number of Shares After Adjustment for Diluted Shares”) calculated by deducting the numberof treasury shares held by the Target as of November 30, 2023, as stated in 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”) (221,630 shares) from the number of shares calculated by adding74

the total number of the Target Shares to be issued upon exercise of 1,060 units of Share Options (as defined 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 December 31, 2023 to the total number ofissued 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).

The

Shareholding Ratio calculated based on the latest information available before the commencement of the Tender
Offer may differ from the above figure due to changes after that date (hereinafter the same).
(Note 2) The breakdown of 1,060 units of the Share Options is as follows (The names of the respective share options aredefined in “(II) Share options” under “(3) Price of tender offer” under “2. Summary of Tender Offer” below;
hereinafter the same):
Name of Share Options

Number of the Target Shares to be

Number of Share Options as ofissued upon exercise of the Share

December 31, 2023 (units)

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 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

26,600Today, the Offeror has entered 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”) (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 (the “Transactions”) in order to ensure that the Target’s
shareholders are solely the Offeror Related Parties, by acquiring all of the Target Shares (including the Target Shares related
to such American Depositary Shares (as defined in “(III) Depositary receipts for share certificates” under “(3) Price oftender 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. Summaryof Tender Offer” below; hereinafter the same); however, excluding Target Shares owned by the Offeror Related Parties
and the treasury shares owned by the Target) and Share Options (the “Target’s Share Certificates”). In addition, theCapital and Business Alliance Agreement has been executed today between the Offeror, MC, and the Target. The Offeror
will conduct the Tender Offer as part of the Transactions provided that the Conditions Precedent are satisfied (or waived
by the Offeror Related Parties).

As of today, the Offeror is not aware of any event of material impediment to thesatisfaction of the Conditions Precedent. The Offeror, together with MC, will implement the procedures and actions
required under the competition laws of Japan, China, South Korea, and the EU to satisfy the Conditions Precedent, based75

on the legal advice of local law firms in Japan and in the relevant foreign jurisdictions. The Offeror Related Parties are
already making the necessary advance preparations for such procedures and actions, and from today, will consult with therelevant authorities concerning competition law to ensure that such procedures and actions can be implemented.
The Offeror has set the minimum number of tendered shares to be purchased in the Tender Offer at 14,458,800 shares(Shareholding Ratio: 14.43%); and if the total number of the Target’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 purchase none of
the Tendered Shares. Meanwhile, with the Offeror’s intention of having the Target Shares go private, the Offeror has not
set the maximum number of tendered shares to be purchased in the Tender Offer; and if the total number of the Tendered
Shares is not less than the minimum number of tendered shares to be purchased, the Offeror will purchase all of the Tendered
Shares. The minimum number of tendered shares to be purchased (14,458,800 shares) has been set so that upon thecompletion 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,
1,000,783, in respect of the number of shares (100,078,370 shares) which is the number of shares calculated by deducting
the number of treasury shares held by the Target as of November 30, 2023, as stated in the Target’s Financial Results(221,630 shares) from the total number of issued shares (100,300,000 shares) as of January 12, 2024 as stated in the Target
Third Quarterly Report). Due to changes in the number of treasury shares held by the Target after relevant time of theinformation, the actual minimum number of tendered shares to be purchased in the Tender Offer may differ from the above
figure. Prior to the commencement of the Tender Offer, we plan to determine the definitive minimum number of tenderedshares to be purchased based on the latest information available at the time of the commencement of the Tender Offer.
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 lumpsum, 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/theirposition as the Target’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 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 toexercise 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, theOfferor Related Parties plan to request the Target to carry out the procedures reasonably necessary for the execution of theTransactions, such as encouraging the Share Option Holders to forfeit their Share Options and according to the Target, if theTarget receives such a request, it intends to cooperate with it promptly 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 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 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) Policies on organizational restructuring,etc. after the Tender Offer (matters concerning “two-step acquisition”)” below, to implement a series of procedures to makethe Offeror Related Parties the Target’s only shareholders (the “Squeeze-out Procedure”). The Offeror plans to use cash on
hand and/or borrowings from financial institutions, etc., to fund the Tender Offer.

76

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 47,818,270 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 Certificates with the
purpose of having the Target Shares go private.

Tender Offer
MCOther shareholders and theOfferorShare Option Holders
50.06%

2.11%

47.84%

Target77

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 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 defined in “(4) Policies onorganizational restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)” below; hereinafter thesame), 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 ratioof 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 of issued 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 (anyfractional shares less than one share resulting from the aggregation of fractional shares shall be discarded; hereinafter thesame) 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.

Squeeze-out through the Share
Consolidation
MC

Other shareholders and theOfferorShare Option Holders

100-(α+50.06)%

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 the voting rights in
the Target.

78

MC

Offeror50.00%

50.00%

TargetAs of today, the Target Shares are listed on the TSE Prime Market. However, as described in “(5) Possibility ofdelisting 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 and Recommendation
to Tender in the Tender Offer for Company’s Share Certificates by KDDI Corporation and Notice of Capital and Business
Alliance” published today by the Target (the “Target’s Press Release”), the Target resolved at its board of directors meeting
held today, as the Target’s opinion as of today, to the effect that, if the Tender Offer is commenced, it shall express its
opinion in favor of the Tender Offer as the Target’s opinion as of today 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 thesame) in advance and receiving delivery of the Target Shares related to such 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.
According to the Target, it has resolved at the above-mentioned board of directors meeting to take the following
procedures for the expression of its opinion. Specifically, the Target has also resolved to request, at the commencementof the Tender Offer, that the Special Committee established by the Target regarding the Tender Offer review whether any
change should be made to the opinion expressed by the Special Committee to the Target’s board of directors as ofFebruary 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 thecommencement of the Tender Offer based on such opinion of the Special Committee, as described in “(ii) Establishmentof an independent special committee at the Target and receipt of a report from the special committee” under “(Measures toensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures toavoid 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.
The Target states that the above-mentioned board resolution of the Target was passed on the assumption that, throughthe Tender Offer and the Squeeze-out Procedure by the Offeror, the Offeror Related Parties will be the sole shareholdersof 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 the Target’s Press
Release and “(II) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by theTarget” under “(2) Background, purpose and decision-making process leading to the decision to conduct the Tender Offer,79

and management policy following the Tender Offer” below.
(2) Background, purpose and decision-making process leading to the decision to conduct the Tender Offer, and management
policy following the Tender Offer
The background, purpose and decision-making process leading to the decision to conduct the Tender Offer by theOfferor 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 the Target, the Target’s Press Release,and the explanations from the Target. Furthermore, the below descriptions of MC are based on the information madepublicly-available by MC, the “Notification Regarding Changing Status of MC Subsidiary (Lawson, Inc.) into that ofEquity-method Affiliate Company” announced today 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 in1984 and changed its trade name in 1985, and IDO Corporation (IDO), which was established in 1987,) with DDI as thesurviving 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 can send and receive largecapacity data at a high speed. Those using optical fibers are referred to as “FTTH” and those using cableTV 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 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 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 growth of society and the enhancement of corporate value together with its partners, and the Offeror
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, according to the Target, the Target was incorporated in April 1975 as Daiei Lawson Co., Ltd. andchanged its trade name to Lawson, Inc. in June 1996. Subsequently, according to the Target, the Target listed its shareson the First Section of the TSE Market in July 2000; and in April 2022, the Target moved to the Prime Market of the80

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” anddirectly managed stores as its main business.
According to the Target, since entering into a business alliance agreement (as amended) with MC in February 2000,
the Target has pursued mutual business synergies with MC and established its position as one of Japan’s leading
convenience store chains. In addition, according to the Target, 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 in preparation for 2025, the 50th anniversary of the Target’s incorporation, focusing its efforts oncreating “new 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 theideal 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 eachbusiness 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 franchising system as theheadquarters of franchise chains for “LAWSON,” “NATURAL LAWSON,” and “LAWSON STORE 100” as well as
directly managed stores. According to the Target, Lawson Urban Works, Inc., a consolidated subsidiary of the Target,
operates the convenience store “LAWSON” mainly in Tokyo and Chiba prefecture; Lawson Store 100, Inc., aconsolidated subsidiary of the Target, operates, and provides management support for, the directly managed stores of“LAWSON STORE 100”; and SCI, Inc., a consolidated subsidiary of the Target, is a functional subsidiary thatcomprehensively manages the business process from procurement of raw materials to sales, improving the efficiencyof, and optimizing the entire process.
According to the Target, amid the outbreak of COVID-19, which has caused major changes in consumer behavior, theTarget has strengthened its lineup of daily-use products such as fresh and frozen foods in order to respond to thecustomers’ stay-at-home demand, and in the current situation where more people are going out as the flow of people
recovers, the Target is responding to this change in consumer behavior more than ever, 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 motivation and spirit of challenge of colleagues working together, theTarget is pursuing “Three Promises” (Note 3) and is accelerating changes to create “new hubs of refreshment in every
community,” which can provide new convenience 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 core business in its
business portfolio strategy and plans to continue to strengthen this business through concentrated investment, and at thesame time, intends to accelerate the evolution of its convenience store business, including peripheral businesses, in orderto implement “new convenience” and create a sustainable business model. As its most recent major initiative, theTarget has been working to realize the world’s fastest quick commerce platform by linking delivery platform companies
with its systems and increasing the number of delivery products it handles.
(Note 3)“Three Promises” refers to “Superior taste,” “Human kindness,” and “Environmental (Machi) friendliness”

81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 for customers at
locations closer to them, in which companies with great discretion are established in eight areas nationwide
to realize “community based × individual customer and individual store-focused.”(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 all of 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-at-home 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 andexpansion into western Japan. Furthermore, in the EC 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 ticketingbusinesses 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 (as of 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 is working to develop its entertainment complex businessby providing high added-value, such as premium seats and other theatrical facilities, in the cinema business andexpanding screening content other than movies. Through these initiatives, the Target is aiming to become the one andonly comprehensive entertainment distribution company.
(D) Financial services businessAccording to the Target, Lawson Bank, Inc., a consolidated subsidiary of the Target, has developed its ATM businessand retail businesses based on 13,509 ATMs installed at LAWSON stores nationwide (as of the end of March 2023); in
addition, it provides services which connect ATM users with partner financial institutions (385 companies as of the endof 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 the number of partner
financial institutions and expanding Lawson Bank’s ATM services. In addition, the Target aims to provide, as the “bank82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, thePhilippines, 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 areprimarily conducted through subsidiaries based on investments by the Target, and in 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 scale of businessand is the main source of overseas sales revenue, in addition to store openings by the Target’s Chinese subsidiaries, theTarget is proceeding with opening stores through mega-franchise agreements with local retailers in cities such as
Shanghai, Chongqing, Shenyang, and Beijing, opening stores based on area license agreements where local partnercompanies have headquarter functions and are responsible for overall operation and development in designated areas,
and is accelerating the expansion of store opening areas and number 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 storesfrom the end of the previous fiscal year). The Target has set a goal of operating 10,000 stores in China in FY 2025, andto 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 in areas 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, businessrestructuring, and organizational restructuring, taking into account the state of its business and geopolitical risks in China;
however, no concrete decisions have been made as of today. Furthermore, in regions 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, demand for 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 withleading local companies, in the Philippines, the Target is promoting full-scale development of franchises, opening newstores 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 the distinction
between sales through the Internet (electronic commerce) and sales at physical stores to encouragepurchasing by customers.

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 thechanging lifestyles and values of consumers due to the impact of the global spread of COVID-19 in order to realize“Challenge 2025,” which is the medium-term management plan for FY 2021 to FY 2025 formulated in preparation for2025, the 50th anniversary of the Target’s incorporation.

Under this committee, the Target Group is taking onchallenges such as providing new forms of conveniences and improving the job satisfaction of employees and store83

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 andshareholder returns,” and “growth of individual group companies and growth of the LAWSON Group as a whole”
through concentrated 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 is characterized
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 high-value-added products and services in the Target
Group’s various businesses, pursue further expansion of scale and efficiency improvements, and deepen DX to achievethese goals. In addition, as demand for a sustainable 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 throughde-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 vision that focuseson three areas: (i) reducing CО2 emissions, (ii) reducing food waste, and (iii) reducing plastic use (incontainers and shopping bags).

The Offeror and the Target executed a capital and business alliance agreement in December 2019 with the purpose ofpromoting 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 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 theTarget, to conduct a joint consideration on collaboration including the privatization of the Target Shares by the threecompanies, i.e., the Offeror Related Parties and third party that was initially considering participating in the Transactions(the “Initial Partner Candidate”), with the Offeror and the Initial Partner Candidate as the new partner candidates of theTarget who can mutually utilize their own real store network and customer bases and support the expansion andfunctional improvement of the Target’s network of real stores across Japan, and expansion of functions in the digitalarea, including utilization for the Target’s digital marketing, (hereinafter the transaction toward the privatization of theTarget 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
equity method affiliates (as of September 30, 2023) including MC and the Target (“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, food84

industry, consumer industry, power solutions, and urban development, as well as the industry digital transformationgroup and next-generation energy business group. According to MC, in addition to trading, MC also plays a role indevelopment, 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 Target 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 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 the issued shares at thattime) 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, accountingfor 29.82% of the issued shares at that time), becoming the Target’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 toMC, 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 that possesses criticalinfrastructure functions that are indispensable to local customers. In addition, MC has expressed that it realizes that
the Target’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 Target’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 base of the Target’s business, which is essential to customers in this way, arevaluable business resources that can serve as the foundation for the MC Group to develop new business concepts indownstream fields. According to MC, MC will continue to seek to provide services that are convenient and profitablefor consumers, create new customer experiences, and support prosperous local communities, including the possibilityof 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 theTarget’s corporate value, it had reached the conclusion by mid-May 2023 that as the environment surrounding the retailbusiness 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 Target Group or the support system for the Target by the MC Group, MC has come to believe that85

collaborating with new partners with a customer base and rich digital knowledge will contribute to further enhancing theTarget’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 Target’s corporate value, taking advantage of the entry into the capital andbusiness 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 in order to consider the possibility ofa 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 the possibility of collaboration through a partnershipwith 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 bothparties have a strong interest in business collaboration with the Target, 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 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, withwhich 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 inevery 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 Target. The Offeror believes that convenience 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 newvalues beyond real stores in the future. Under such business conditions, the Offeror recognizes that the Target hasdeveloped 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 andindividual store-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 ofcustomer contact points, such as through Seijo Ishii, which is a supermarket with strong brand power due to its highquality 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
than ever before. The Offeror believes that collaborating with the Target 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 and86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 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 Target in addition to deepening its understanding of the Target through explanations regarding the Target fromMC.
In late June 2023, the Offeror appointed Nishimura & Asahi (Gaikokuho Kyodo Jigyo) as a legal advisor independentof 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 midMay 2023, MC appointed Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. as a financial advisor independent of theOfferor 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, haveheld consultations on multiple occasions since late August 2023 on fundamental matters such as the transaction structureand schedule, as well as specific measures to enhance the corporate value of the Target. As a result, in late August 2023,
the 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 by promoting their businessactivities based on mutual collaboration. Specifically, for the Target Group’s business activities that support customers
nationwide through the provision of food and daily necessities, by utilizing the knowledge of the Offeror Group, an
infrastructure company with leading domestic shares in the field 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 enhance store 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 toreduce the environmental 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 the short-term benefits of the Target, and building
stronger alliances will ultimately contribute to the enhancement 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 the Target, and in early
September 2023, the Target indicated its intention to establish a review system for discussions 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 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 haveconsecutively commenced due diligence on the Target to deepen their understanding of the business environment, growthstrategies, management issue, etc., with respect to the Target and its business. At the same time, they confirmed matterswith respect to the fields of business, accounting, tax affairs, legal affairs, etc. of the Target.

87

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 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 to deny the risk of a shortterm downturn in business results due to a temporary increase in costs incurred as a result of taking various measuresand 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 minority shareholders by providing the Target’s
minority shareholders with appropriate and reasonable opportunities to sell the Target Shares, taking various measuresthat lead to the growth of the Target over the medium to long term, even if such measures may not be directly related tothe short-term benefits of the Target, and building stronger alliances, will ultimately contribute to the enhancement of theTarget’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 the corporate
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 of consultation, 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 theTarget 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 theInitial 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 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, andthey 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 is completed
in order for the Target 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.

88

(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 Target’s approximately 16,800 real stores, which are the strengths of both the Target and theOfferor (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 thefunctions and commodities of the Offeror Related Parties and the Target.
Specifically, as measures to expand the networks and strengthen the functions of the Target’s stores, theOfferor Related Parties are considering providing new services by combining the Offeror’s assets, such as thehandling of Target goods and services at au shops, the provision of commodities and services centered oncommunications of the Offeror at Target stores (such as merchandise-based communication services), and theprovision of services that are more in tune with customers’ lives through the introduction of online remotecustomer 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 storesfrom the Offeror’s membership base and developing and offering new services for members 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 system with the Offeror to expand the Target’s earnings,
as well as utilizing the Offeror’s DX knowledge and technologies 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 andpromoting initiatives to decarbonize the Target’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 Target stores by 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 to achievement 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 until today on a specific business alliance, such as the management structure and business policies following
completion of the Transactions. After several consultations, as of today, 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 Alliance Agreement and the Shareholders Agreement, pleaserefer to “(II) Shareholders Agreement” and “(III) Capital and Business Alliance Agreement” under “(6) Material
agreements relating to the Tender Offer” below. In connection with the execution of the Capital and Business AllianceAgreement, it was agreed that the business alliance agreement between MC and the Target on September 16, 2016, will89

be terminated subject to the effectiveness 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 the Tender Offer Price per Target Sharebe 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 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 thesimple average of the closing prices for the 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 to7,102 yen, which was the simple average of the closing prices for the three months ending on December 25, 2023, anda 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 by American Depositary
Receipts be 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 from the perspective of considering the interests of theTarget’s minority shareholders.
In response to that request from the Target, the Offeror made a second proposal (“Proposal No. 2”) in writing to theTarget 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 price of the Target Shares on the Prime Market of theTSE 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 thesimple average of the closing prices for the six-month period ending on December 29, 2023), setting the Share Option
Price at 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 theTarget on January 6, 2024 to once again consider revising the Tender Offer Price from the perspective of considering theinterests 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 theTarget on January 11, 2024 setting the Tender Offer Price per Target Share at 9,500 yen (9,500 yen is the amountcalculated 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 the simple average of the closing prices forthe one-month period ending on January 10, 2024, a 32.50% premium to 7,170 yen, which was the simple average ofthe closing prices for the three-month period ending on 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 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 arequest from the Target on January 12, 2024 to once again consider revising the Tender Offer Price from the perspectiveof considering 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 theTarget on January 18, 2024 setting the Tender Offer Price per Target Share at 10,000 yen (10,000 yen is the amount90

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 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 forthe one-month period ending on January 17, 2024, a 37.76% premium to 7,259 yen, which was the simple average ofthe 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 for the six-month period ending on January 17, 2024), setting the Share
Option Price at 1 yen, and setting the Tender 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 arequest from the Target on January 24, 2024 to consider further raising the Tender Offer Price in exchange for an opinion
in favor of and a recommendation to tender in the Transactions, from the perspective of considering the interests of theTarget’s minority shareholders and in light of the recent growth in the Target’s business, including the details of theTarget’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 theTSE 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
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 ending on 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 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 request from theTarget on January 28, 2024 to consider further raising the Tender Offer Price from the perspective of considering theinterests of the Target’s minority shareholders, for the opinion in favor of, and a recommendation to tender in, theTransactions.
In response to that request from the Target, the Offeror made a sixth proposal (“Proposal No. 6”) in writing to theTarget on January 29, 2024, setting the Tender Offer Price per Target Share at 10,290 yen (10,290 yen is the amountcalculated 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 the simple average of the closing prices forthe one-month period ending on January 26, 2024, a 38.81% premium to 7,413 yen which was the simple average of theclosing prices for the three-month period ending on 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 the Tender 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 fromthe Target 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, theTransactions.
In response to that request from the Target, the Offeror made a seventh proposal (“Proposal No. 7”) in writing to theTarget on January 30, 2024 setting the Tender Offer Price per Target Share at 10,350 yen (10,350 yen is the amountcalculated by adding a 23.01% premium to 8,414 yen, which was the closing price of 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 for91

the one-month period ending on January 29, 2024, a 39.19% premium to 7,436 yen, which was the simple average ofthe 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 the closing 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 by American 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 Price for theopinion in favor of, and a recommendation to tender in, the Transactions from the perspective of fully securing theinterests 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 theTarget on January 31, 2024 setting the Tender Offer Price per Target Share at 10,360 yen (10,360 yen is the amountcalculated by adding a 23.00% premium to 8,423 yen, which was the closing price of 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 forthe one-month period ending on January 30, 2024, a 38.89% premium to 7,459 yen, which was the simple average ofthe 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 the closing 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 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 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 thebusiness 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 period ending on February 1, 2024, a 38.10%
premium to 7,502 yen, which was the simple average of the closing prices for the three-month period ending on February
1, 2024, and a 43.17% premium to 7,236 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 today to set the Tender Offer Price per Target Share at 10,360 yen, the Share Option Price at 1 yen, and theTender Offer Price per Target Shares relating to American Depositary Shares represented by American Depositary
Receipts at 10,360 yen.

(II) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer by the Target
According to the Target’s Press Release, the decision-making process leading to and grounds for the opinion in favorof the Tender Offer by the Target are as follows.
(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 thedecision 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 expertise and past performances of SMBC Nikko Securities, toreceive advice and assistance from a financial perspective, including advice on the calculation of the value of the Target

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Shares and the policy for negotiation with the Offeror Related Parties, and appointed Anderson Mori & Tomotsune
Gaikokuho-Kyodo-Jigyo (“Anderson Mori & Tomotsune”) as its external legal advisor, after examining the expertiseand past performances of Anderson Mori & Tomotsune, to receive legal advice, including advice on the measures to betaken to ensure the fairness of the procedures for the Transactions (Initial Proposal), the procedures for the Transactions(Initial Proposal), and the method and process of decision-making by the Target concerning the Transactions (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, the Transactions (Initial Proposal) including theTender Offer may fall under important transactions with controlling shareholders, and therefore the Transactions (Initial
Proposal) may fall under the type of transaction 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 theperspective of enhancing the corporate value of the Target and securing the interests of the minority shareholders of theTarget, 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 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, 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, theTarget, 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 (theTarget’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 decision of theSpecial Committee, please refer to “(ii) Establishment of independent special committee at the Target and receipt of awritten 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).
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 the Tender Offer and torecommend 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 the decision 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”) (for the 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 thatthey have no objection” 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”

93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 the Tender Offer, such as measures toensure 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, theTarget has also received approval from the Special Committee to appoint SMBC Nikko Securities as its financial advisor
and third-party valuator, and Anderson 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 thespecial committee” 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, 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 andthird-party valuator.
Furthermore, according to the Target, the Target has established a system within the Target to review, negotiate, andmake decisions regarding the Transactions from a standpoint independent of the Offeror Related Parties (including thescope and duties of the Target’s officers and employees to be involved in the review, 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 (for details on such review system, please refer to “(vii)
Establishment of independent review system at 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 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 of valuation of theTarget 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 the Transactions, and based on these, the Target
carefully considered whether to implement the Transactions and whether 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 explanation on 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 the Initial Partner Candidate with respect tothe 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 aquestionnaire 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 responseto 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.

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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 awritten proposal for partial changes to the initial proposal regarding the Transactions (Initial 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 to the 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 theInitial 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.
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 andBusiness Alliance Agreement as of today. For an outline of the Capital and Business Alliance Agreement, please referto “(iii) Capital and Business Alliance Agreement” in “(6) Material agreements relating to the Tender Offer” below. As
a result of the execution of the Capital and 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 AllianceAgreement 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, theTarget requested the Offeror to reconsider an increase of the Tender Offer Price, because the Tender Offer Price in theInitial 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 recommendthat 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 the Tender Offer
Price, because the Tender Offer Price in Proposal No. 3 was insufficient to recommend that the Target’s minority
shareholders tender their shares. According to the Target, on the January 18, 2024, the Target received Proposal No. 4
in writing from the Offeror in response to such request. According to the Target, on January 24, 2023, in response to
Proposal No. 4, the Target requested that the Offeror consider an increase of the Tender Offer Price for the Opinion infavor of and Planned Commencement of a Tender Offer in view of the current growth of the Target’s businessperformance, including Target’s Financial Results, and continuous increase in the price of Target’s shares, because theTender Offer Price in Proposal No. 4 was insufficient to recommend that the Target’s minority shareholders tender theirshares. According to the Target, on January 26, 2024, the Target received Proposal No. 5 in writing from the Offeror
in response to such request. According to the Target, on January 28, 2024, in response to Proposal No. 5, the Target95requested that the Offeror consider an 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 Proposal No. 5 was insufficient to recommend that
the Target’s minority shareholders tender their shares.

According to the Target, on January 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 the Offeror 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 Pricein the Proposal No. 6 was insufficient to recommend 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
the Offeror consider a further increase of the Tender Offer Price for the Opinion in favor of and Planned Commencementof a Tender Offer, because the Tender Offer Price in the Proposal No. 7 was insufficient to recommend 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 by American 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 the Special 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 from the Special Committee on the reasonableness of thedetails, material conditions precedent, and process of preparation of the business plan prepared by the Target for theperiod 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 accordancewith the policy of negotiation deliberated and determined by the Special Committee, and immediately reported to theSpecial 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”) from the Special Committee whichstated 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 andconditions 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 theTarget’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 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 in the event that the Tender Offer is commenced (for a summary of the Written Report, 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 measures to avoid conflicts of interest)” under “(II) Background of calculation” under “(4) Basis for calculationof the price of tender offer” under “2. Summary of Tender Offer” below).

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(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 boardof directors meeting held today whether the Transactions, including the Tender Offer, would contribute to theenhancement of the Target’s corporate value and whether the terms and conditions of the Transactions, including theTender Offer Price, were appropriate, taking into account the legal advice received from Anderson Mori & Tomotsune,
the advice received from SMBC Nikko Securities, and the details of a share valuation report concerning the results ofvaluation of the Target Shares submitted on February 5, 2024 (the “Share Valuation Report (Nikko Securities)”) (pleaserefer to “(iv) Receipt of a share valuation report from an independent financial advisor and a third-party valuator of theTarget” 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) Basisfor calculation of the price of tender offer” under “2. Summary of Tender Offer” below), with the utmost respect for thedetails of the Special Committee’s judgment expressed in the Written Report.
As a result, according to the Target, the Target has concluded that the Transactions will contribute to the enhancementof the Target’s corporate value as described below.
According to the Target, as described in “(I) Background, purposes and decision-making process leading to thedecision to conduct the Tender Offer” above and the following synergies related to the Transactions below, the retailindustry in which the Target operates is facing a severe situation characterized by increasingly intense competition acrossbusiness categories and increasingly diverse consumer needs, as well as expected increases in various costs, including
raw material, labor, and logistics costs. According to the Target, 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’sbusinesses, pursue further expansion of scale and efficiency improvements, and deepen DX to achieve these goals, andas 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 of each of the initiatives totransform into “Real × Tech Convenience” will contribute to enhancing the Target’s corporate value in the medium tolong 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 in the short term, and it will be difficult for the Target to implement eachof the initiatives simultaneously and promptly while maintaining the Target’s listing and pursuing the interests of minority
shareholders, and this also has limitations from the perspective of contributing to enhancing the Target’s corporate value.
Accordingly, according to the Target, today, 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 to accelerate the Target’s growth by
the Offeror making the Offeror Related Parties the sole shareholders of the Target, more promptly and boldly promoting
the transformation into “Real × Tech Convenience,” and actively implementing each of the initiatives to drasticallystrengthen the Target’s businesses and management 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 the Transactions 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 theenvironment around the world, created businesses from the perspective of “convenience,” and has grown through the97appreciation of customers. In recent years, the Target has taken advantage of the diversification 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,” theTarget 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 the challenge of becoming “Real × Tech Convenience” equipped with QEC from a “real” retailer throughTech.
In order to accelerate the expansion of the new service based on Tech, QEC, by establishing a system by around spring
2024 so that consumers can check the product inventories of each of the Target’s stores on their smartphones, the Target
aims to enable approximately 14,600 inventory bases of the Target’s stores, which will be the base of QEC, andapproximately 3,000 different items to be directly linked to consumers, and products 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 theOfferor Group, which has strengths in the digital field, QEC will become even more convenient and easy to use forcustomers, and it is highly likely to accelerate and stabilize 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 thedevelopment of systems through the dispatch of engineers and other human resources from the Offeror, and enhancing
the Offeror’s customer base of more than 13 million subscription service members and the digital marketing system thatutilizes high-resolution location-based big data unique to a telecommunications company with approximately 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 suchas TV commercials, and new digital contact points such as SNS and a company’s own applications, retail media thatutilize data obtained at real stores as a result of the development of DX and distribute ads tailored to customer needs are
attracting attention. According to the Target, the Target also aims to expand its marketing business using consumer datacollected 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 thegrowth of such business, the Target needs to strengthen the Target Group’s membership base and expand loyal customers.
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 more customers and attracting
more customers through new customer referrals from the Offeror Group’s economic area and referrals to individualstores 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 and by maximizing the value of data through promotion ofthese measures, the Target will be able to consider promoting cross-selling and developing new businesses and services,and expects to expand its marketing business.
(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 infrastructure that is
indispensable for everyday life, and the Target, which started as “handyman in the community,” is determined to continue
pursuing and advancing the “hub of refreshment in every community” from the customer’s perspective, in order to ensure
its position as an essential party of the community that provides support for residents.

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As a provider of social

infrastructure, the Target believes that in the context of the need to resolve issues faced by local communities, to revitalize
local communities, and to further promote coexistence with local communities, it is necessary to create future
convenience stores by utilizing cutting-edge 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 of communities, suchas by improving convenience for consumers in regions without stores.

In addition, the 5G network and satellite

communications technology of the Offeror, a telecommunications operator, can be used to develop stores and provide
products in augmented reality and virtual reality linked to its own apps through metaverse services, including provisionof medical services such as remote health checkups through vital sensing. Through the provision of services that
support various aspects of life in this way, the Target hopes to encourage innovation into lifestyle experiences andbehaviors associated with the evolution of technology, 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 human resources andknow-how
According to the Target, the Target believes that through the use of digital and technology, it is required to concentrate
its management resources on the evolution of its core business, domestic convenience stores, and the 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 invarious business areas. Under these circumstances, the Target believes that by promoting human resource exchanges
between the Offeror Group, the MC Group, and the Target, 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 human resources.

In addition, the Target can expect to strengthen the Target Group’s portfolio andmaximize the 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 toenvironmental changes, the Target has introduced its environmental vision, “Lawson Blue Challenge 2050!,” aiming torealize a decarbonized society through decarbonization activities and reduction 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 and PET bottle materials with biomass
materials, the Target believes that it will be able to achieve the goal above by 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 to 2013 levels), (ii) a reduction of food loss by 100% (compared to 2018
levels), and (iii) 100% use of eco-friendly materials for containers and packaging of original products.

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(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 philosophy of“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 the Target’s growth in thisbusiness 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; and that 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 and reallocation of
resources
In recent years, according to the Target, it has been pointed out that there has been an increase in the human andeconomic costs required to maintain listing, and the Target recognizes that it cannot deny the possibility that such anincrease in costs will also be a further burden on its management. The Target believes that taking the Target Shares
private through the Transactions will allow it to avoid the costs associated with maintaining listing and allocating
resources to the various key initiatives described above.
Generally, according to the Target, the disadvantages of taking shares private include becoming unable to raise funds
through equity financing from the capital markets and becoming unable to enjoy the benefits that have been enjoyed asa 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 from financial institutions that are the Target’s business
partners even after the Transactions have been implemented. In addition, the Target’s name recognition, branding, andsocial credibility, which are key to recruitment of human resources in the Target, are largely acquired and maintained
through its business activities; and it is able to acquire and maintain them through implementation of businesses evenafter the Transactions 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 as compensationequivalent to retirement benefits; however, in order not to harm the interests of the Share Option Holders throughimplementation 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 theimplementation 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 the Transactions 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.

100

(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 of
Tender Offer” below.

(c)

In the Transactions, although this Tender Offer Period is designated as 20 business days (Note),
which is the shortest period provided by laws and regulations, because the period from theannouncement 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 byminority shareholders and the opportunity for a tender offer for Target Shares by a person otherthan the Offeror are secured.

(Note) The Tender Offer Period will be a period which covers 20 business days in the United States,
which is the minimum number of days required as a tender offer period under U.S. securities
laws. The same applies hereinafter to the description of business days of the Tender Offer Period.
(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

101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 acquired fromthe 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 Priceand 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, the Target has resolved that in the opinion of theTarget at the present time, if the Tender Offer is commenced, the Target will express its favor for theTender Offer and that it will recommend that the Target shareholders tender in the Tender Offer, andrecommend 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 thedelivery of the Target Shares pertaining to the American Depositary Shares represented by the American
Depositary Receipts, and resolved that it will leave the holders 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
Committee to the Target’s board of directors as of February 5, 2024, and, if there is no change, shall state
as such to the Target’s board of directors and, if there is any change, the Special Committee shall state
its opinion after the change, and, based on the opinion of the Special Committee, the Target’s board of
directors will express its opinion on the Tender Offer again when the Tender Offer is commenced.
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 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 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 andestablishing 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 these points, 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 today, where they agreed that, as directors of theTarget after completion of the Transactions, MC and the Offeror will each appoint three directors, and MC and theOfferor will each appoint one representative director of the Target. For a summary 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 on102

organizational 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 Target implement reasonably necessary procedures for carrying out the Transactions, suchas recommending that the Share Option Holders forfeit their Share Options. Therefore, in order not to harm the interestsof 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 the Target
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 isintended to not harm the interests of the Share Option Holders, is planned to be made in consultation with the Target andthe Share Option Holders after the Tender Offer has been successfully completed, and is expected to be madeindependent 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.
(3) 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 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 Offer from the time of theTender 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 the Offeror Related Parties, and that the Transactions, including theTender Offer, constitute transactions that typologically 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 made by the Target.
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 the interests of minority shareholders whowish 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 and the 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)
(ii)
(iii)
(iv)
(v)
(vi)

Receipt of a share valuation report from an independent third-party valuator by the Offeror;
Establishment of an independent special committee at the Target and receipt of a report from thespecial committee;
Advice from an independent legal advisor by the Target;
Receipt of a share valuation report from an independent financial advisor and a third-party valuatorby the Target;
Advice from an independent legal advisor by the Special Committee;
Receipt of a share valuation report and the Fairness Opinion (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 measures103

(vii)(viii)(ix)(x)

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;
Establishment of an independent review system at the Target;
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;
Establishment of measures to secure purchase opportunities from other purchasers; andEstablishment 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 as measures 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. Summary of Tender Offer” below.
(4) Policies on organizational restructuring, etc. after the Tender Offer (matters concerning “two-step acquisition”)
If the Offeror is unable to acquire all of the Target’s Share Certificates in the Tender Offer, the Offeror jointly with MCplans to implement a series of procedures to make the Offeror Related Parties the only shareholders of the Target throughthe 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 jointlywith MC plans to request that the record date of the Extraordinary Shareholders’ Meeting be a date close to thecommencement of the settlement of the Tender Offer. Each of the Offeror Related Parties intend to vote in favor of eachof the above proposals at the Extraordinary Shareholders’ Meeting.

If the proposal for the Share Consolidation isapproved at the Extraordinary 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 from theimplementation of the Share Consolidation, an amount in cash equal to the purchase price to be obtained by selling to theOfferor the Target Shares equivalent to the total number of such fractional shares will be delivered to the shareholders inaccordance 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 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 be delivered to the Target
shareholders who did not tender in the Tender Offer (however, excluding the Offeror Related Parties and the Target) willbe the same as the price obtained by multiplying the Tender Offer Price for the Target Shares by the number of Target
Shares held by each such shareholder. After the above process, a court petition to obtain permission for a voluntary salewill 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 held byTarget shareholders who did not tender in the Tender Offer (excluding the Offeror Related Parties) will be a fraction of lessthan 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, the number of Target Shares
held by the Depositary Bank after the Share Consolidation is also expected to be a fraction of less than one share. In this104

case, according to the American Depositary Receipts Notifications (as defined in “(III) Depositary receipts for sharecertificates” under “(3) Price of tender offer” under “2. Summary of 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 theabove, the Companies Act provides that if fractional shares of less than one share are created as a result of the Share
Consolidation, then the shareholders of the Target may request that the Target purchase all of the fractional shares less than
one share that they hold at a fair price in accordance with Articles 182-4 and 182-5 of the Companies Act and other relevantlaws and regulations and may file a court petition to determine the price 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 theprice 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 holder of thecorresponding Target 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 theTender Offer and such Share Options are not exercised and remain outstanding, the Offeror Related Parties plan to requestthat the Target implement reasonably necessary procedures for the execution of the Transactions, such as recommendingthat 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, 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 the Target
shareholders who did not tender in the Tender Offer will be adopted, and in such case, the amount of money delivery to
the Target’s shareholders will be calculated to be equal to the Tender Offer Price multiplied by the number of Target Shares
held by the shareholders of the Target. In such cases, the amount of money to be delivered to the Depositary Banks inrespect of the Target Shares represented by American Depositary Receipts and held by the Depositary Banks will be thesame. According to the American 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 theAmerican 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 Target, and theTarget 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, evenif such delisting criteria are not met as at the time of successful completion of the Tender Offer, in the case where the Tender
Offer is successfully completed, a series of procedures is planned to be implemented so that the Offeror Related Parties

105

will be the only shareholders of the Target, as explained in “(4) Policies on organizational restructuring, etc. after the Tender
Offer (matters concerning “two-step 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 with MC as oftoday, with respect to the Transactions. A summary of the Master Agreement is 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 Target. MC will nottender 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, ormake it difficult to implement the Transactions, or which have a concrete possibility of doing so(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 theexercise or non-exercise of voting rights at the Target’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 know that there is such proposal, they will reasonably promptly notify the otherparty to that effect and of the details of the relevant proposal, and consult on responses to theCompeting 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 the extent
reasonably possible and commercially and reasonably necessary to ensure that the Target will106

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 theTarget 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 the completionof 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 the Target
Group from the completion of settlement of the Tender Offer to the completion of the Transactions,(D) the Offeror Related Parties shall be obliged not to transfer their Target Shares from theexecution date of the Master Agreement to the completion of the Transactions, unless otherwise
following the Definitive Agreements or with the prior written consent of another party, (E) the
Offeror Related Parties, as soon as practicable after the execution of the Master Agreement, shallbe obliged to legally complete the Competition Act Response Procedure, to which they haveobligations in relation to the implementation of the Transactions in accordance with laws andregulations, (F) the Offeror Related Parties shall respectively make representations and warranties(Notes 1 and 2), and (G) the Offeror Related Parties shall be 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 Target Shares.

In addition, regarding the Target Group, MC

represents and warrants as to (a) the validity of the survival and powers of the Target, (b) the total
number of issued shares of the Target, the number of share options, etc., (c) no legal insolvency
procedures, (d) non-applicability of anti-social forces, and (e) accuracy of information disclosedby the Target 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 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.

(II)

Shareholders Agreement

As described in “(1) Outline of the Tender Offer” above, the Offeror executed the Shareholders Agreement with MC asof today, 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.
Matters concerning the organization and operation of the Target, etc.

(i)Organizational planning of the Target (board of directors, board of company auditors, companies
with financial auditors)

107



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 the Offeror
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 towhich 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 thedate 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 thecompletion of the Transaction
The right to appoint auditors of the Target (the number of auditors shall be four, of which one eachshall 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 Target
Matters related to the distribution policy of the Target (100% in principle, based on the International
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 andwarranties, (B) in the case where the nominated director concurrently holds the post of officer or employee ofa company, etc. carrying out a business that may compete with the business of the Target, the obligation tohave the director obtain approval after submitting a report to the Target’s board of directors, (C) the prohibitionof headhunting of the Target Group employees, etc., and (D) the obligation to provide information on theTarget 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 AllianceAgreement with MC and the Target as of today with respect to the capital and business alliance between the Offeror Related
Parties and the Target Group after the Transactions. A summary of the Capital and Business Alliance Agreement is asfollows.

(i) Purposes
・Maximize corporate value of the Target Group by strengthening each business of the Target Group to realizea 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

108

・

Expand the business foundations of the MC Group and the Offeror Group and create new value throughgrowth of the Target Group(ii)

Details of the capital alliance・

Establishment of the capital alliance between the Offeror Related Parties and the Target by the Transactions(this provision shall be effective on the closing date (meaning the date when the voting rights ratio of MC andthe Offeror in the Target becomes 50.00%, respectively, after the Share Consolidation becomes effective;
hereinafter the same)(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 beeffective as of the closing date), and establishment of the collaboration committee as a forum for consultationon the policy and progress of the Business Alliance

(A)
(B)

(C)

(D)

・

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
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
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
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 consideration of details of
implementation of the Business Alliance and roles of each party based on the provision of sufficientmanagement resources by the Target Group to the Offeror Related Parties and their groups within the scopeof 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 andspecific roles of each party based on the results of the above consultation and consideration within 12 months
from the execution date of the Capital and Business Alliance Agreement (this provision shall be effective asof the closing date)・

Implementation of measures agreed upon by the collaboration committee (the relevant measures and the rolesof 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 as of the closing date)(iv)

Management of the Target, etc.
・Confirmation by the Offeror Related Parties of the Target Group’ officers and employees strengthening theTarget’s existing businesses and developing new businesses to maximize Target’s corporate value, andoperating with the aim of “improving Life Time Value of consumers” and “a prosperous local community inJapan” through the Business Alliance (this provision will be effective 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 the109commercially reasonable scope of the Target’s transaction practices existing before the closing date (thisprovision will be effective as of the closing date)・The Offeror Related Parties’ obligation to maintain the employment of the Target Group employees and tomaintain the employment terms and conditions of the employees not to be substantially less than the level asof 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 with laws 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 substantially the same business operation as before in line withchanges in the market situation or the business environment, or any other case that follows prior establishedpractice of the Target Group) ( this provision will be effective as of the closing date)・

Sincere consultation about the stock option system of the Target that exists as of the execution date of theCapital and Business Alliance Agreement

・

Target’s obligation to make requests to each shareholding association to the extent commercially reasonable
to require all of the Target Shares owned by each shareholding association of the Target Group to takemeasures to legally subscribe to the Tender Offer and to take measures required to comply with laws andregulations 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 the Business Alliance (thisprovision shall be effective as of the closing date)2.

Summary of Tender Offer(1)

Summary of Target and MC(I)

Summary of Target
(I)

Name

Lawson, Inc.

(II)

Address

Osaki 1-11-2, Shinagawa-ku, Tokyo(III)

Title/name of

President and CEO, Representative Director, Chairman of the Board Sadanobu

representative

Takemasu(IV)

Detailsofbusiness(V)

Stated capital

(VI)

Date

of

establishment

Development of franchise chains of “Lawson” convenience stores
58,506 million yen (as of November 30, 2023)
April 15, 1975
Mitsubishi Corporation(VII)

50.11%Major

The Master Trust Bank ofshareholders

Japan, Ltd. (trust account)andCustody Bank of Japan, Ltd.

shareholding(trust account)

ratio

SMBC Nikko Securities Inc.

2.31%

KDDI Corporation

2.11%

August 31,

NTT DOCOMO, INC.

2.09%2023) (Note 1)

Japan Securities Finance Co.,

(as

of

Ltd.

110

8.15%
2.74%

1.73%

JPMorgan Securities Japan

1.20%

Co., Ltd.
Mitsubishi

UFJ

Morgan1.20%

Stanley Securities Co., Ltd.
STATESTREET

BANK

AND TRUST COMPANY
505103(standingproxy:

Settlement&

Clearing

0.93%

Services Department, Mizuho
Bank, Ltd.)(VIII)

Relationship between Offeror and Target
Capital

As of today, the Offeror holds 2,110,000 Target Shares (Shareholding Ratio:

relationship

2.11%).

Personnel

Not applicable.

relationship

The Offeror has executed the Capital and Business Alliance Agreement with theBusiness

Target. In addition, the Offeror has executed the business alliance agreement withrelationship

the Target, MC, and menu, Inc.

Applicablestatusof

The Offeror does not fall under a related party.

related parties(IX)

Target’s consolidated management performance and consolidated financial position for the last
three years (based on international accounting standards)

Accounting
periodTotal assets
Total shareholders’ equity
Gross operating
revenueCore operating
profitFiscal year ending February2023
2,242,421 million yen
253,858 million yen
1,000,385 million yen
64,311 million yen

Incomeattributable toowners of the

29,708 million yen

parentIncome per share
Dividend pershare

296.86 yen
150 yenTarget’s consolidated management performance and consolidated financial position for the last
three years (based on Japanese accounting standards)

Accounting period

Fiscal year ending

111

Fiscal year endingFebruary 2021

February 2022

Consolidated net assets

272,931 million yen

278,473 million yen

Consolidated total assets

1,365,430 million yen

1,337,245 million yen

2,674.53 yen

2,726.97 yen

666,001 million yen

698,371 million yen

Consolidated operating income

40,876 million yen

47,096 million yen

Consolidated ordinary income

37,610 million yen

47,571 million yen

8,689 million yen

17,900 million yen

Consolidated net income per share

86.84 yen

178.87 yen

Dividend per share

150 yen

150 yen

Consolidated net assets per share
Consolidated total operating
revenue

Net income attributable to ownersof the parent(Note 1)“(VII) Major shareholders and shareholding ratio (as of August 31, 2023)” is quoted from “status of major
shareholders” in the second Quarterly Report for the 49th fiscal year submitted by the Target on October 13,
2023.

(Note 2)The Target has prepared its consolidated financial statements in accordance with the international financial
reporting standards (IFRS) from the fiscal year ending February 2023.

(II)

Summary of MC
(I)

Name

Mitsubishi Corporation(II)

Address

Marunouchi 2-3-1, Chiyoda-ku, Tokyo(III)

Title/nameofrepresentative

Representative Director, President and Chief Executive Officer Katsuya
Nakanishi
MC is a company that is developing business jointly with bases in(IV)approximately 90 countries and regions around the world and approximately
1,700 consolidated business companies. Also, it has a system with 10 groups(natural gas, industrial materials, oil and chemicals solution, mineral resources,
Details of businessindustrial infrastructure, automotive & mobility, food industry, consumer
industry, power solutions, and urban development) as well as the industry DX
department; and it has broad industries as its business fields, and is promoting
DX (digital transformation) and EX (energy transformation) to address
digitalization and a low or decarbonized society collectively as measures forimportant issues for the future.

(V)

Stated capital

204,447 million yen (as of September 30, 2023)(VI)

Date of establishment

April 1, 1950 (founded on July 1, 1954)
The Master Trust Bank of Japan, Ltd. (trust account)(VII)
Major shareholders and

EUROCLEAR

shareholding ratio

Transaction Services Division, MUFG Bank, Ltd.)(as

Custody Bank of Japan, Ltd. (trust account)

5.46%

Meiji Yasuda Life Insurance Company

4.16%

Tokio Marine & Nichido Fire Insurance Co., Ltd.

2.88%

of

September 30,2023) (Note 1)

BANK

112

S.A./N.V.

(standing

14.84%
proxy:

9.22%

The Master Trust Bank of Japan, Ltd. (employee pension trust

2.30%

account/voting trustee exercise type)
STATE STREET BANK WEST CLIENT-TREATY 505234(standing proxy: Settlement & Clearing Services Department,

1.60%

Mizuho Bank, Ltd.)The Master Trust Bank of Japan, Ltd. (employee pension trust

1.26%

account/Mitsubishi Electric Corporation account)
JP MORGAN CHASE BANK 385781 (standing proxy:
Settlement & Clearing Services Department, Mizuho Bank,

1.09%

Ltd.)
JPMorgan Securities Japan Co., Ltd.
(VIII)

Relationship between Offeror and MCCapital relationship

Not applicable.

Personnel relationship

Not applicable.
The Offeror has executed the Business Alliance Agreement with MC, theBusiness relationshipApplicable
related parties
(IX)

1.07%

statusTarget, and menu, Inc.
of

The Offeror does not fall under a related party.

MC’s consolidated management performance and consolidated financial position for the last three years

Accounting period

Fiscal year ending MarchFiscal year ending MarchFiscal year ending March

2021

2022

2023

Total assets

18,634,971 million yen

21,912,012 million yen

22,152,882 million yen

Total stated capital

6,538,390 million yen

7,857,172 million yen

9,124,417 million yen

3,803.01 yen

4,659.68 yen

5,648.84 yen

Revenue

12,884,521 million yen

17,264,828 million yen

21,571,973 million yen

Income before tax

253,527 million yen

1,293,116 million yen

1,680,631 million yen

Net income

132,241 million yen

1,004,459 million yen

1,271,499 million yen

172,550 million yen

937,529 million yen

1,180,694 million yen

116.86 yen

635.06 yen

809.29 yen

116.57 yen

625.73 yen

805.69 yen

134 yen

150 yen180 yenEquity attributable toowners of the parent per
share

Net income attributable toowners of the parent
Basic net income per share
Diluted net income per
share
Dividend amount per share(Note 1)“(VII) Major shareholders and shareholding ratio (as of September 30, 2023)” is quoted from “status of major
shareholders” in the second Quarterly Report for the 2023 fiscal year submitted by MC on November 13, 2023.

(2)

Schedule

The Offeror intends to promptly conduct the Tender Offer once the Conditions Precedent are satisfied (or waived by theOfferor Related Parties). As of today, the Offeror aims to commence the Tender Offer in around April 2024. However, as

113

it is difficult to accurately predict the period required for the procedures to be taken by the competition authorities in andoutside Japan, the details of the schedule for the Tender Offer will be announced promptly after they are determined.
The Tender Offer Period is scheduled to be 20 business days (Note 1).
(Note 1)Since the Tender Offer Period will be a period which covers 20 business days in the United States, which is
the minimum number of days required for the tender offer period under U.S. securities laws, the Tender Offer
Period may be greater than 20 business days.

The schedule of the capital and business alliance is as follows:(1)

Resolution date of the board of directors(2)

Execution date of the Capital and Business
Alliance Agreement

February 6, 2024
February 6, 2024

(3)

Commencement date of the Tender Offer

April, 2024 (Plan)(4)

Effective date of the Share Consolidation

August, 2024 (Plan)(5)

Commencement date of business alliance

September, 2024 (Plan)(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)

114

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 heldon 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 Shareswere issued in the United States. However, according to the Target, the Target was not involved in theissuance 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 the Target), the Offeror, in accordance with Article 27-2, paragraph (5) of the Act andArticle 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 typeof share certificates, etc., to be purchased, because it is necessary to solicit applications for sales, etc., forall 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 theOfferor, which is a resident of Japan, 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 the acquisition as a tender offer agent in practice. Accordingly, in the Tender Offer,

115

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, theowners of the American Depositary Receipts who wish to tender in the Tender Offer should deliver theAmerican Depositary Receipts to the Depositary Banks and 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 the Target

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 the Transactions including the Tender Offer.
After considering the valuation method that should be adopted among various share valuation methods whenassessing the share value of the Target, UBS Securities assess the share value of the Target using each of (i) the average
market price analysis because the Target Shares are listed on the Prime Market of the Tokyo Stock Exchange, (ii) thecomparable company analysis because there is a listed company comparable to the Target and it is possible to infer byanalogy the share value of the Target by comparing the Target with such a 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 premise that the Target is a going concern and from the perspectivethat it would be appropriate to assess the share value 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 each of 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 the per sharevalue of the Target Shares was calculated to range from 7,264 yen to 8,721 yen, based on the closing price of the Target
Shares listed on the Prime Market of the Tokyo Stock Exchange on the valuation base date of 8,721 yen and the simple
average of closing prices over the prior one month of 8,154 yen, over the 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 through comparison withtrading prices and financial indices indicating profitability, etc. of listed companies engaged in businesses considered tobe 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 the free cash flow that116

is expected to be generated by the Target in the future using a certain discount rate, based on the earnings forecast of theTarget in and after the fiscal year ending February 2024 which takes into consideration various factors including theTarget’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 a basis for the DCF analysis, does not include any fiscal year in which asubstantial increase/decrease in profit is expected. Further, the business plan does not assume the implementation of theTransactions, and does not include the synergies expected to be realized from the implementation of the Transactions
being completed because it is difficult to specifically estimate such synergies at this time.
(Note)The Share Valuation Report (UBS Securities) has been delivered solely for the Offeror to examine theTender Offer Price of the Target 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, the Transaction (including, without limitation,
the manner or structure of the Transaction or other elements) or (b) the relative advantage of the Transaction
compared with other strategies or transactions that may be adopted or implemented by the Offeror, orbusiness decision-making related to promoting or implementing the Transaction. Furthermore, the Share
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 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 theamount, nature, or other aspects of any 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 priceat which the Target 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 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 Target or their other advisors 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 not been independently verified by UBS Securities or anyof 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 theOfferor’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 tothe 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 otherwritten or oral information provided in connection with the Share Valuation Report (UBS Securities), and117

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 Target, and UBS Securities has relied upon the opinion of the Offeror as to thereasonableness 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 theOfferor 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.

Allassumptions 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, 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 is given
as to the achievement or reasonableness of, and no reliance should be placed on, any Forecasts containedin the Share Valuation Report (UBS Securities).

The Share Valuation Report (UBS Securities) was

prepared based on the economic, regulatory, market, and other conditions 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 indicatedtherein), and in 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 the Offeror in connection
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 andrelevance of methods of financial 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 the analyses. UBS Securities’ analysis results must be considered holistically, and reference toa part or summary thereof, without considering all of such analysis results as a whole, may give rise 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 made any
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 furnished with any such valuation orappraisal; (ii) not carried out any assessment as to the commercial merits of the Transaction; (iii) not118

conducted any legal, tax, accounting, or other analysis in respect of the Transaction, 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 theTransaction, no delay, limitation, restriction, or condition would be imposed that would have an adverse
effect on the Target, 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 andreceives remuneration for its services as financial advisor, and such remuneration t becomes payablesubject 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 or disapproval of the Tender Offer by theTarget’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 of today.
The Tender Offer Price of 10,360 yen per share of the Target Shares represents a price obtained by adding a premiumof 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 commencement of the Tender Offer, premiumof 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 three months until the same date (7,545 yen), or premium of
42.62% to the simple average of closing prices for the last six months until the same date (7,264 yen), respectively.
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 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 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 described above, the Offeror has not obtained a valuation report from a third-party valuator.
(iii)

American Depositary Receipts

Considering that the American Depositary Receipts represent the American Depositary Shares deposited with
Depositary Banks, and one American Depositary Shares is equivalent to one Target Share, the price of the tender offer
of the American Depositary Receipts is set at 10,360 yen per share of the American Depositary Shares, which is thesame price as the Tender Offer Price per share of the Target Shares.

119(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, the Offeror, 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, the Offeror Related Parties
provided the Target 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 Target Shares by three companies(i.e., the Offeror Related Parties and the Initial Partner Candidate) to a collaboration involving the privatization of theTarget Shares by two companies (i.e., the Offeror Related Parties). Thereafter, the Offeror Related Parties and theTarget continued to consider the Transactions.
In addition, based on the results of due diligence on the Target 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 Target on
December 26, 2023, setting the Tender Offer Price per Target Share at 8,650 yen, the Share Option Price at 1 yen, andthe 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 theTender 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 the Target’s minority shareholders.
In response to that request, the Offeror made Proposal No. 3 in writing to the Target on January 11, 2024, setting theTender 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 the Target’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 by American Depositary Receipts, at
10,000 yen. In response to Proposal No. 4, the Offeror received a request from the Target on January 24, 2024 to120

consider further raising the Tender Offer Price, considering the interests of the Target’s minority shareholders and inlight of the recent growth in the Target’s business results, including the details of the Target’s Financial Results and thecontinued 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 by American Depositary Receipts, at
10,200 yen. In response to Proposal No. 5, the Offeror received a request from the Target on January 28, 2024, toconsider further raising the Tender Offer Price, considering the interests 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 American Depositary Receipts, at
10,290 yen. In response to Proposal No. 6, the Offeror received a request from the Target on January 29, 2024, toconsider 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, and recommendation 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 Price at 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 theTarget that the Offeror will consider further raising the Tender Offer Price for the opinion in favor of, andrecommendation 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 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 Price at 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 fromthe 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, the Share Option Price at 1 yen, and the Tender Offer Price per Target Share relating toAmerican Depositary Shares, represented by American Depositary Receipts, at 10,360 yen. The Offeror also agreed
with MC today, to set the Tender Offer Price per Target Share at 10,360 yen, the Share Option Price at 1 yen, and theTender Offer Price per Target Shares relating to American Depositary Shares, represented by American Depositary
Receipts, at 10,360 yen.
(Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of the Tender Offer Priceand measures to avoid conflicts of interest)
As described in “(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” in “1. Purposes of Tender Offer” above, considering
the fact that the Target is a consolidated subsidiary of MC, which is one of the Offeror Related Parties, and therefore theTransactions including the Tender Offer and execution of the Capital and Business Alliance Agreement fall under thetype 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 Alliance121

Agreement, the Offeror Related Parties and the Target implemented the measures set forth in (i) to (x) below with a viewto ensuring the fairness of the Tender Offer from the time of the Tender Offer, eliminating arbitrariness in decisionmaking concerning the Transactions and execution of the Capital and Business Alliance Agreement, securing thefairness, 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 aTarget related party and has no material interest in the Transactions including the Tender Offer. In addition, since theOfferor took each of the measures in (i) and (ii) to (x) below and determined the Tender Offer Price through consultationand negotiations with the Target, the Offeror has not obtained an opinion concerning the fairness of the Tender Offer
Price (fairness opinion) from UBS 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 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” 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 the establishment of the Special Committee, the Target, since
early September 2023, with the advice from Anderson Mori & Tomotsune, for the purpose of establishing a system toreview, negotiate, and make decisions concerning the Transactions from the perspective of enhancing the Target’s
corporate value and protecting the interests of minority shareholders of the Target from a standpoint independent of theOfferor 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 the Target
received the initial proposal regarding the Transactions (Initial Proposal), and that, in reviewing and negotiating theTransactions, it is necessary to take sufficient measures to ensure the fairness of the terms and conditions of theTransactions, including the establishment of a special committee, because the Transactions fall under the type oftransaction involving the issue of structural conflicts of interest and information asymmetry with minority shareholders.
According to the Target, at the same time, the Target considered candidates for the members of the Special Committeewith the advice from Anderson Mori & Tomotsune. According to the Target, after confirming that the candidates forthe members of the Special Committee were independent of the Offeror Related Parties, and that they had no materialinterest 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 & supervisory board
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 purposeof the Special Committee being at an appropriate scale while securing a balance 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 the Special Committee, a fixed amount of remuneration is paid as122

consideration for their duties, regardless of the 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 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. Purposesof 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, and consulted the Special Committee on the Consultation Matters.
In establishing the Special Committee, according to the Target, the Target’s board of directors resolved that (a) theSpecial Committee may obtain advice from the Target’s advisor concerning the Transactions in considering theConsultation Matters and may entrust the Target’s share valuation, provision of the Fairness Opinion concerning theTransactions, and other matters deemed necessary by the Special Committee to a third-party organization and the like,and the reasonable cost for such entrustment in such case will be borne by 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, the authority 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 the Target, theabove 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 the five statutory auditors expressed their opinion thatthey 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 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 transferred from MC to the Target and is not ina position to receive instructions from the Offeror Related Parties, and the side of the Offeror Related Parties has neverbeen involved in the Transactions and is not in a position to be involved therein. Therefore, since it has been determinedthat the Target’s decision-making in the Transactions has no risk of a conflict of interest, he has participated in thediscussions and resolutions at the Target’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 over approximately
22 hours) from September 13, 2023 until February 5, 2024, and performed its duties regarding the Consultation Mattersthrough 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 andthird-party valuator of the Target, was independent and professionally qualified, and approved the appointment thereof.

123

The Special Committee also confirmed that Anderson Mori & Tomotsune, the legal advisor of the Target, does notconstitute an Offeror Related Party or a Target related party and had no material 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 professionallyqualified, 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 and had 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 the Target” below, theSpecial 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 involved in the review, negotiation, and judgment for theTransactions and their duties) is independent and fair.
According to the Target, based on the above, the Special Committee is considering the measures to be taken to ensure
the fairness of the procedures for the Transactions based on the opinions obtained from Nakamura, 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, importantpreconditions, and the background of preparation, and confirmed the reasonableness of these matters and approved thesame.
According to the Target, the Special Committee received explanations from the Target on the purpose and significanceof the Transactions as well as the expected impact on the business of the Target, and held a question-and-answer session
on the foregoing. The Special Committee also presented questions to the Offeror Related Parties and held a questionand-answer session in the form of interviews with the Offeror Related Parties on the purpose and background of theTransactions 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 the value 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 the calculations by each method of calculation, and importantconditions precedent, and confirmed the reasonableness of these matters after Q&A sessions, discussions andconsiderations.
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, andexpressed 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 the Offeror upon receipt and after obtaining analysis
and opinions from SMBC Nikko Securities and Daiwa Securities regarding the response policies and the policy for thenegotiation with the Offeror, considered these 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 theOfferor in order to achieve the significance and purpose of the Transactions as the Target, and participated in the overall
process of 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 a proposal fromthe Offeror that includes the Tender Offer Price of 10,360 yen per share, and as a result, the Target received a total ofeight proposals, resulting in a price increase of 19.77% from the initial price proposal.
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’s Press Release concerning124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, and the Share Valuation
Report (Daiwa Securities) and the Fairness Opinion received as of February 5, 2024, after careful consultations andconsideration on the Consultation Matters, the Special Committee, with the unanimous consent of all members,
submitted the Written Report on the Consultation Matters to the Target’s board of directors as of February 5, 2024, thecontent of which is substantially as described below.
(a) Contents of the report by the Special Committee
1

The Transactions will contribute to the Target’s corporate value and the purposes of the Transactions areappropriate and reasonable.

2

The fairness and appropriateness of the terms and conditions of the Transactions (including the tender offer pricein the Tender Offer) are ensured.

3

Due consideration is given in the Transactions to the interests of the Target’s shareholders through fair procedures.

4

It is appropriate for the Target’s board of directors to express an opinion in favor of the Tender Offer torecommend that the Target’s shareholders tender in the Tender Offer and to recommend that the owners ofAmerican Depositary Receipts deliver the American Depositary Receipts to the Depositary Banks in advanceand 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 judgment of the Share Option Holders.

5

In addition to No.1 to No.4 above, the implementation of the Transactions is not considered disadvantageous 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 are appropriate andreasonable (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 be achieved.
(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 of Tech andutilizing 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 technological structure,125

including the development of systems through the dispatch of engineers and other humanresources from the Offeror, and enhancing the Offeror’s customer base and the digitalmarketing 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 onestop response from the collection to the aggregation, analysis, and visualization of a wealthof big data, and maximizing the value of data through promotion of these measures, theTarget will be able to consider promoting cross-selling and developing new businesses andservices, and Target’s marketing business are expected to expand.
(III) Coexistence with local communities by providing social infrastructure utilizing cutting-edge
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.
・ 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 anddispatch 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 MCGroup’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 theachievement of the goal “Lawson Blue Challenge 2050!”, the environmental vision
formulated by the Target, will be strengthened and accelerated.

126

・ Specifically, for example, by utilizing the functions of the Offeror Group and the MC Group,
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 andpurchasing data, and the replacement of plastic containers and PET bottle materials withbiomass 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 digital technology
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.
(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 digital technology
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.
(ii) Availability of alternative transactions

・

From the perspective of enhancing the Target’s corporate value, there are no specific transactions
that are viable alternatives to the Transactions.

(iii) Consistency between the Target’s explanation of the synergies and those of the Offeror Related Parties.

・

・

2

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 and those of theOfferor stated in the Target’s Press Release.

Report on the Items for Consultation Matter (iii) (whether due consideration is given in the Transactions to theinterests 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 the127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
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 the Target,
excluding Mr. Masayuki Itonaga and Mr. Kiyotaka Kikuchi, who are directors or employees ofMC, 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 the Special
Committee) are expected to deliberate and pass resolutions.
Among the Target’s directors, Mr. Sadanobu Takemasu, President and CEO, previously worked128

at MC. However, the M&A Guidelines set forth that if an independent special committee isestablished 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 experience that are indispensable
and cannot be substituted in considering and negotiating the Transactions from the viewpoint ofenhancing the corporate value of the Target, and also based on 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 theperspective of independence and fairness with respect to Mr. Takemasu’s participation in theconsideration of the Transaction and negotiations with the Offeror.
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
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, and obtained the Share
Valuation Report (Daiwa Securities) from Daiwa Securities as materials concerning thevalue 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 byindependent 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 the Tender Offer
Price is fair from a financial point of view with respect to the Target’s general shareholders,129excluding the Offeror Related Parties and their affiliates.
・ The Special Committee believes that the Fairness Opinion can be evaluated as a measure toensure fairness.
(IV) Market check・ The Offeror plans to set the Tender Offer Period at 20 business days, which is the shortest
period provided by laws and regulations. However, the Tender Offer is a tender offer witha prior announcement, and since a relatively long period of time will be secured until thecommencement of the Tender Offer, there will be reasonable opportunities for competing
takeover offers by other potential 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 does notin itself constitute an obstacle to the fairness of the terms and conditions of the Transactions.
(VI) Improved information provision to general shareholders and transparency of the process

・ The Target’s Press Release discloses certain factors regarding the Business Plan, which isthe premise for the DCF analysis in the Share Valuation Report (Nikko Securities) and theShare 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’s Press Release 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 the Companies
Act, and this fact is explicitly disclosed in the Target’s Press Release.
・ Furthermore, the Target’s Press Release states that the Squeeze-out Procedure will be
conducted promptly after the completion of the Tender Offer, and that the amount of money
delivered to minority shareholders in the Squeeze-out Procedure will be calculated to beequal to the Tender Offer Price multiplied by the number of Target Shares held by each suchshareholder (excluding the Offeror Related Parties and the Target).
・ In light of the above, measures have been taken to prevent coercion with respect to theTransactions.

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3

Report on the Items for Consultation Matter (ii) (whether the fairness and appropriateness of the terms andconditions 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 theOfferor (8,650 yen), and negotiations were carried out by the Target with the aim of making theTransactions 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

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 forthe 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 the boardof directors of the Target on April 13, 2023), and updates to the Business Plan made inAugust 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 preparedafter 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 the process
of formulating the Business Plan does not raise suspicions about the fairness of the contentsof the Business Plan.
・ In addition, Daiwa Securities, the Special Committee’s independent financial advisor, also131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 thecalculation 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,
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, and 42.62%
on the average closing price over the past six months on the Day before Last.
・ In conclusion, from the perspective of comparing the premium level of the Tender Offer
Price with other similar deals, the premium level of the Tender Offer Price is considered tobe reasonable, taking into account that although the premium level of the Tender Offer Priceis below the average and median prices based on the closing price of the Day before Last
and the average closing price over the past month on the Day before Last, it is above 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 the target shares exceeding 1x PBR
before the deal was announced, based on the average closing price over the past threemonths on the Day before Last and the average closing price over the past six months on
the Day before Last, 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 the Stock
Acquisition Rights, thereby acquiring all of Target’s Share Certificates to provide the Target’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’s Press Release, at the time of the announcement of the Tender Offer,

132

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4

the Target intends to express its opinion to the Share Option Holders that it leaves the decisionof 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 the appropriatenessof the price of the Share Options in the Tender Offer.

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 the decision as to whether to tender shares in the Tender Offer to the judgment of the
Share Option 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 theTender Offer, (b) it recommends that the holders of the American Depositary Receipts tenderin the Tender Offer by delivering their American Depositary Receipts to the Depositary Bankin advance and receiving delivery of the Target Shares related to such American Depositary
Shares represented on the American Depositary Receipt, and (c) that it leaves the decision ofwhether 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.
(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 & Tomotsune as its outside
legal advisor independent of the Offeror Related Parties and the Target, and has received legal advice from Anderson
Mori & Tomotsune including advice on the measures to be taken to ensure the fairness of the procedures for theTransactions, 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 and has no materialinterest in the Transactions including the Tender Offer. According to the Target, although the Target has executed alegal 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 the Target, 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 factof 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
completion of the Transactions, it was determined that Anderson Mori & Tomotsune was independent of the Offeror

133

Related Parties and whether the Transactions are successfully completed. Furthermore, according to the Target, theSpecial Committee, at its first meeting, confirmed that Anderson Mori & Tomotsune was independent and professionallyqualified.

(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 to ensure thefairness 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 nomaterial interest in the Transactions, including the Tender Offer. SMBC Nikko Securities is one of the same groupcompanies of Sumitomo Mitsui Financial Group, Inc. as Sumitomo Mitsui Banking Corporation that conducts financing
transactions as part of normal banking 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 valuatorand based on the fact that information blocking measures have been taken between the department which calculates thevalue of the Target Shares in SMBC Nikko Securities, other departments in SMBC Nikko Securities, and Sumitomo
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 afinancial 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 the Target’s requests for SMBC Nikko Securities to calculate
the value of the Target Shares are considered to have no particular concerns, the Target appointed SMBC Nikko
Securities as its financial advisor and third-party valuator. The Special Committee, at its first meeting, confirmed that
SMBC Nikko Securities was independent and professionally qualified, and approved the appointment thereof as thefinancial advisor and third-party valuator of the Target. The Target has not obtained from SMBC Nikko Securities anopinion concerning the fairness of the Tender Offer Price (fairness opinion) since the Target determined that the measures
to ensure the fairness of the Tender Offer Price and to avoid conflicts of interest have been implemented and that fairnessof the Transactions is sufficiently ensured.
According to the Target, with respect to the Transactions, SMBC Nikko Securities is paid a performance fee 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 inthe same kind of transactions and the appropriateness of the fee arrangement in which the Target would incur areasonable financial burden in the event that the Transactions are not successfully completed, and also based on thedetermination that SMBC Nikko Securities’ independence would not be denied by the fact that a performance fee
payable on condition that the Transactions are completed 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 and completeness of suchmaterials and information, and assumes no obligation or responsibility for such 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

134any third-party organization to evaluate, appraise, or assess such assets or liabilities. If any problems arefound 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 fact that would have amaterial effect on the Share Valuation Report (Nikko Securities). It was assumed that the business planused by SMBC Nikko Securities in the Share Valuation Report (Nikko Securities) was prepared by theTarget with reasonable and appropriate procedures based on the best estimate and judgment as of thereference 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 ofthese assumptions, and assumes no obligation or responsibility therefor. The results of the calculation by
SMBC Nikko Securities have been submitted to the Target, at the request of the Target, for the sole purposeof assisting the Target’s board of directors to consider the Tender Offer Price.

Such results of thecalculation 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 Parties and the Target, tocalculate 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 price method since
the Target Shares are listed on the TSE Prime Market and thus the market price thereof is available; and the DCF analysis
to reflect in the share valuation the status of future business activities of the Target.
The range of the value per share of the Target Shares calculated by SMBC Nikko Securities based on each of theabove 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 two business days
immediately preceding the date of the announcement of the expected commencement of the Tender Offer, the sharevalue range per share of the Target Shares was calculated to be 7,248 yen to 8,039 yen, based on the simple average ofthe closing prices for the previous one month of the Target Shares on 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 forthe previous six months (7,248 yen). Under the DCF analysis, the share value range per share of the Target Shares wascalculated 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, anddiscounting 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

135significant year-on-year increases or decreases in profits are expected. The synergies expected to be realized throughthe 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 has received legal advice fromNakamura, Tsunoda & Matsumoto, including advice on the measures to be taken to ensure the fairness of the proceduresfor the Transactions, the procedures for the Transactions, and the method 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 nomaterial 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 regardless of whether the Transactions are
successfully completed, and its fee does not include a performance fee conditioned on successful completion of theTransactions.

(vi) Receipt of a share valuation report and the Fairness Opinion from an independent third-party valuatorby 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 to ensure thefairness 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 theTarget 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 that the 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 constitute an Offeror Related Party or a Target related party and has no material interest in theTransactions, 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 ofwhether the Transactions are successfully completed, and its fee does not include a performance fee 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 and the 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 whenassessing the Target Shares, Daiwa Securities assessed the per share value of the Target Shares using (i) market priceanalysis, because the Target Shares are listed on the Prime Market of the TSE and thus the market price thereof is136

available and (ii) DCF analysis so as to reflect the details of the Target’s performance and forecasts in the valuation,
based on the premise that the Target is a going concern and from the perspective 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 each of the above
methods is as follows:
Market price analysis: 7,264 yen to 8,721 yen
DCF analysis:

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 share value of theTarget Shares was assessed to range from 7,264 yen to 8,721 yen, based on the fact that the closing 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 ofclosing prices of the Target Shares listed on the Prime Market of the TSE over the last one month was 8,154 yen, overthe 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 Businessand the Chinese Business excluded from the consolidated business (the “Target’s Consolidated Business (Excluding the
Seijo Ishii Business and the Chinese Business)”) was analyzed, and the 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 sharevalue of the Target Shares was assessed to range from 7,037 yen to 14,514 yen. The Business Plan prepared by theTarget that was 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 through recovery 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 specifically estimate 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 thevaluation 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 theapproval of the Tender Offer.
(Note)

Daiwa Securities has assumed and relied on the accuracy and completeness of all information that 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 containedin the Fairness Opinion, Daiwa Securities has assumed that as of the date on which the opinion contained137

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 or assessment of any of the assets or liabilities (including, but notlimited 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 their respective
affiliates under any applicable laws relating to bankruptcy, insolvency or similar matters.

Daiwa

Securities has not conducted any physical inspection of the properties or 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 have been preparedaccording to reasonable and appropriate procedures, and reflect the best currently available estimates andjudgment of the management of the Target, and with the consent of the Target, Daiwa Securities has reliedon such information without conducting any independent verifications of the accuracy, validity or
feasibility of the business plans of both companies. Daiwa Securities has assumed that all assumptions
for the preparation of the business 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 andeconomy and other matters, many of which are not within 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 more or 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 toany strategic alternatives that may be available to the Target, nor has Daiwa Securities been requested theTarget to do so. Daiwa Securities is not a legal, accounting or tax expert and has neither independently
analyzed or reviewed 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 the Transactions,irrespective of whether the Transactions are successfully completed. Also, Daiwa Securities is expected
to receive reimbursement from the Target of any expenses incurred in the course of the provision of its
services. The Target understands that Daiwa Securities and its affiliates have provided, or may provide
in the future, services for transactions to Offeror, MC and their affiliates, for which Daiwa Securities andits affiliates have received, or may receive, compensation, and has given prior consent to the provision ofsuch 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 respective138

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 the Special
Committee with reference information to review the Tender Offer Price.

Daiwa Securities does notrecommend 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 theSpecial Committee may disclose the Fairness Opinion to any third party without the prior written consent
of Daiwa Securities. The Fairness Opinion is not addressed to any third party other than the Target andno third party may trust or rely on the opinion for any purpose. Moreover, the Fairness Opinion does notconstitute 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 otherrelated matters.
The Fairness Opinion addresses only the fairness of Tender Offer Price from a financial point of view tothe holders of the general shareholders of the Target other than the Offeror, MC and their affiliates, and theTarget 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 the general shareholders of the Target other thanthe Offeror, MC and their affiliates. Daiwa Securities does not provide any opinion on any premise or
assumption upon which the determination of Tender Offer Price was based or the underlying businessdecision of the Target to proceed with the Tender Offer. Daiwa Securities is also not expressing any
opinion as to the prices at which the shares of common stock of the Target will be traded at any time after
the date of 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 Price by 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 ofa 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 thedate of the Fairness Opinion. Additionally, although the Fairness Opinion may be affected by futurechanges 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 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” in “1. Purposes of Tender Offer” above,
considering the fact that the Transactions, including the Tender Offer, fall under the type of transaction involving theissue of structural conflicts of interest and information asymmetry with minority shareholders, the Target has establisheda system within the Target to review, negotiate, and make decisions regarding the Transactions from a standpoint
independent of the Offeror 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 as a basis for the valuationof the Target’s share value) and consultation and negotiations with the Offeror 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 such139

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 the viewpoint of independence and fairness.
(viii) Unanimous approval of all disinterested directors of the Target and the opinion of all auditors of the Target thatthey have no objection
According to the Target, as described in “(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” in “1. Purposes of Tender Offer” above,
the Target’s board of directors carefully considered and discussed whether the Transactions, including the Tender Offer,would contribute to the enhancement of the corporate value of the Target and whether the terms and conditions of theTransactions, 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.
As a result, 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 ofTender Offer” above, the Target determined that 10,360 yen per share, the Tender Offer Price, is a reasonable pricethat 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 the Target’s minority shareholders with a reasonable opportunity tosell the Target Shares at a price with an appropriate premium, and resolved, at the Target’s board of directors meeting
held today, (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) torecommend 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 the relevant American
Depositary Receipts to tender their shares in the Tender Offer; and (iv) that the Target would leave the decision as towhether or not to tender their shares in the Tender Offer to the judgement of the Share Option Holders.
According to the Target, at the Target’s board of directors meeting 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 the Target’s board of directors meeting above, all of 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 position of officer 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 throughthe Transactions, they did not participate in the meeting 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, 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 ofinterest, he has participated in the discussions and resolutions at the Target’s board of directors meeting above.

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As described above, the Offeror intends to promptly conduct the Tender Offer once the Conditions Precedent aresatisfied (or waived by the Offeror Related Parties). As of today, the Offeror aims to commence the Tender Offer inaround April 2024; however, it is difficult to accurately predict the period required for the procedures to be taken by thecompetition authorities in and outside Japan. According to the Target, at the Target’s board of directors meeting held
today, the Target resolved to (i) request, at the commencement of the Tender Offer, that the Special Committee 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 (ii) again express the Target’s opinion regarding the Tender
Offer upon the commencement of the Tender Offer based on such opinion of the Special Committee.
(ix) Establishment of measures to ensure purchase opportunities from other offerors
Since the Offeror aims to commence the Tender Offer in around April 2024 and there is a substantial period until thecommencement of the Tender Offer, the Offeror believes that an opportunity for the Target’s minority shareholders tomake an appropriate decision regarding the tender of the Tender Offer and an opportunity for persons other than theOfferor 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 competingtransactions 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 an agreement related to competing transactions (including the exercise or nonexercise of voting rights at the Target’s shareholders’ meeting that conflict with or infringe on the Transactions), but theOfferor Related Parties have not made any agreement that contains a transaction protection clause that prohibits theTarget 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 for competitive 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 onwhether to tender their shares in the Tender Offer
As described in “(4) Policies on organizational restructuring, etc. after the Tender Offer (matters concerning ‘two-stepacquisition’)” in “1. Purposes of Tender Offer” above, (A) promptly after completion of the settlement of the Tender
Offer, the Offeror plans to request that the Target convene the Extraordinary Shareholders’ Meeting, at which the mattersfor resolution shall include a partial amendment of the articles of incorporation to abolish the provision concerning theshare unit number on the condition that the Share Consolidation takes effect, and a method that does not secure the rightto demand purchase of shares or the right 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 theopportunity 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.
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 theTender Offer would destabilize the successful completion of the Tender Offer, which in turn might not serve the interestsof minority shareholders who wish to tender in the Tender Offer, it has not set a minimum number of the “Majority of141

Minority” in the Tender Offer. However, since the Offeror Related Parties and the Target has taken the measures in (i)through (ix) above and (x), they believe that due consideration was given to the interests of the Target’s minority
shareholders.
(III) Relationship with valuator
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 the Tender Offer.
(5)

Number of share certificates to be purchased
Number of shares to be purchased

Minimum number of shares to be

Maximum number of shares to bepurchasedpurchased

47,924,270 shares

14,458,800 shares- shares(Note 1) If the total number of the Tendered Shares is less than the minimum number of shares to be purchased in the Tender
Offer (14,458,800 shares), the Offeror will purchase none of the Tendered Shares. If the total number of theTendered Shares is not less than the minimum number of shares to be purchased in the Tender Offer(14,458,800 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, 47,924,270 shares, which is thelargest number of the Target Shares that the Offeror may acquire through the Tender Offer, is stated as the numberof 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 theTarget Shares underlying the Share Options (106,000 shares), less the number of treasury shares owned by theTarget as of November 30, 2023 (221,630 shares) as stated in the Target’s Financial Results and the number of theTarget Shares owned by the Offeror Related Parties (52,260,100) as of today (47,924,270 shares).
(Note 3) Shares constituting less than one unit (tangen-miman kabu) are also subject to the Tender Offer. If a shareholder
exercises the right to demand purchase of shares constituting less than one unit pursuant to the Companies Act, theTarget may purchase these shares during the Tender Offer Period in accordance with statutory procedures.
(Note 4) The treasury shares held by the Target are not scheduled to be acquired through the Tender Offer.
(Note 5) “Number of Shares to be Purchased” and “Minimum Number of Shares to be Purchased” are provisional figures
based on the information available as of today. The actual figures in the Tender Offer may differ from the figures
above due to changes such as changes in the number of treasury shares held by the Target after said date. The final“number of shares to be purchased” and “minimum number of shares to be purchased” will be determined prior tothe commencement of the Tender Offer, based on the latest information available as of the commencement of theTender Offer.
(6) Changes in ownership ratio of share certificates due to tender offer
Number of voting rights pertaining to
the share certificates held by the(Ownership ratio of share certificates before the tender
21,100

offer

Offeror before the tender offer

2.11%)

Number of voting rights pertaining to
the share certificates held by special(Ownership ratio of share certificates before the tender
undetermined

related parties before the tender offer

offer
undetermined)142

Number of voting rights pertaining to
the share certificates held by the(Ownership ratio of share certificates after the tender
500,342

offer

Offeror after the tender offer

49.94%)

Number of voting rights pertaining to
the share certificates held by special(Ownership ratio of share certificates after the tender
501,501

offer

related parties after the tender offer
Total number of voting rights of allshareholders(Note 1)50.06%)
999,718“Number of voting rights pertaining to the share certificates held by special related parties before the tender offer”
and its “Ownership ratio of share certificates before the tender offer” has been undetermined as of today, but it
will be disclosed after investigation before the commencement of the Tender Offer. Since the share certificatesheld by each special related party excluding the Target Shares held by MC (50,150,100 shares) are subject to theTender Offer, “Number of voting rights pertaining to the share certificates held by special related parties after thetender 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 theTarget’s third Quarterly Report to the number of the Target Shares underlying the Share Options (106,000 shares),less the number of treasury shares owned by the Target as of November 30, 2023 (221,630 shares) as stated in theTarget’s Financial Results and the number of the Target Shares owned by MC (50,150,100) as of today(50,034,270 shares).
(Note 3)

“Total number of voting rights of all shareholders” is the number of voting rights of all shareholders (the numberof 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 denominatorof the Total Number of Shares After Adjustment for Diluted Shares (1,001,843).

(Note 4)

“Ownership ratio of share certificates before the tender offer” and “Ownership ratio of share certificates after thetender offer” are rounded to the nearest second decimal place.

(7) Purchase price (scheduled)(Note)

496,495,437,200 yen

The purchase price indicated is the amount obtained by multiplying the number of shares to be purchased statedin “(5) Number of share certificates to be purchased” above by the Tender Offer Price (10,360 yen) per share of
the Target Shares. If the actual number of shares to be purchased in the Tender Offer differs due to changes in
the number of the Target Shares excluding the treasury shares held by the Target, the purchase price may be subject
to change.

(8) 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 thereof
If the total number of the Tendered Shares is less than the minimum number of shares to be purchased in theTender Offer (14,458,800 shares), the Offeror will purchase none of the Tendered Shares. If the total number of
the Tendered Shares is not less than the minimum number of shares to be purchased in the Tender Offer(14,458,800 shares), the Offeror will purchase all of the Tendered Shares.

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(II) Other conditions and method of tender offer
The “method of settlement”, the “date of public notice of commencement of the tender offer,” and “otherconditions and method of tender offer” will be announced as soon as they are determined. Nomura Securities Co.,
Ltd. will be appointed as the tender offer agent.
(III) Others
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 make an offer topurchase securities pertaining to the Tender Offer. If shareholders and the Share Option Holders wish to make anoffer 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, norconstitute a part of, an offer to sell or purchase, or solicitation to sell or purchase, any securities, and neither thispress 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 be relied 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 prescribed by Japanese law,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 and standards. The
financial information contained in this press release and the documents referenced in this press release is based onJapanese accounting standards or 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 theTarget are corporations 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 arising under the
U.S. federal securities laws. It may not be possible to commence legal proceedings against a non-U.S. corporationand 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 andaffiliates to subject themselves to the 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 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 “SecuritiesAct”) 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 orguarantee that the results implied or expressly stated by these forward-looking statements will be achieved. The

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“forward-looking statements” contained in this press release and the documents referenced in this press release havebeen prepared based upon the information available to the Offeror Related Parties as of the date of this press release,and unless otherwise 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 take actions 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 and Exchange Related Laws and Regulations of Japan andother 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 pricedetermined 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.]
If a shareholder exercises the right to demand purchase of shares less than one unit pursuant to the Companies
Act, the Target may purchase its treasury shares during the Tender Offer Period in accordance with statutory
procedures.
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 and decision-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) Possibilityof 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)

Expression of favor for the Tender Offer

According to the Target’s Press Release, the Target resolved at the board of directors’ meeting held today, as the current
opinion of the Target as of today, (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 the Target tender their shares in the Tender Offer; (iii) torecommend 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 related to the American Depositary Shares
represented by the relevant American Depositary Receipts to tender their shares in the Tender Offer; and (iv) that theTarget 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.
For details of the process of the decision-making by the Target’s board of directors, 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 haveno 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)” in “(II) Background leading to calculation” under “(4)Basis for calculation of the price of tender offer” above.
(II) Capital and Business Alliance Agreement

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The Offeror has entered into the Capital and Business Alliance Agreement between MC and the Target as of today.
For details of the Capital and Business Alliance Agreement, please refer to “(III) Capital and Business Alliance Agreement”
under “(6) Material agreements relating to the Tender Offer” in “1. Purposes of Tender Offer.”(2)

Other information considered to be necessary for investors to determine whether to tender their shares in theTender 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 today that it would revise theyear-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 of Year-End Dividend Forecast (No Dividend)”
announced today 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 make an offer to purchasesecurities pertaining to the Tender Offer. If shareholders and the Share Option Holders wish to make an offer to sell theirsecurities, 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 sellor purchase, or a solicitation of an offer to sell or purchase, any securities, and neither this press release (or part of thispress 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 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, theTarget nor any of their respective affiliates assumes any obligation to update these expressions concerning future prospects
to reflect actual performance and other circumstances and 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 Japanese law, 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 ExchangeAct”) 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 and standards. The financial information contained in this press release andthe documents referenced in this press 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 othercountries. 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 orenforce 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 jurisdiction of a U.S. court.
Unless otherwise stated, all procedures relating to the Tender Offer shall be conducted in Japanese. Although all or partof 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 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 21Eof the Securities Exchange Act. Known and unknown risks, uncertainties, and other factors could cause actual results todiffer 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 by these forward-looking statements will be achieved. The “forward-looking statements” contained inthis press release and the documents referenced in this press release have been prepared based upon the information in thepossession of the Offeror Related Parties as of the date of this press release, and unless otherwise required by applicablelaws and regulations, none of the Offeror Related Parties, the Target nor any of their respective affiliates assumes any

147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, andthe tender offer agent (including the related parties thereof) may purchase or take actions to purchase the Target Sharesoutside 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 applicablelaws 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 therelevant information concerning such purchases is disclosed in Japan, it shall also be disclosed in the United States by anequivalent 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 distributionof this press release shall not be interpreted as an offer to purchase or solicitation of an offer to sell share certificatesconcerning the Tender Offer, but simply as a distribution of information.

148