Kobayashi Pharmaceutical evaluates ¥500 billion buyout offer

Kobayashi Pharmaceutical is evaluating a potential buyout offer exceeding ¥500 billion ($3.2 billion) from private equity firms CVC Capital Partners and Nippon Sangyo Suishin Kiko. The proposal, which may include participation from the company’s founding family, aims to take the Japanese health products firm private.

The potential deal follows a major crisis in early 2024 involving contaminated red-yeast supplements. The company faced significant scrutiny after detecting puberulic acid, a toxic compound linked to kidney damage and suspected fatalities. The scandal resulted in product recalls and an estimated ¥12.7 billion in expenses for the firm.

As of a recent Tokyo market close, Kobayashi’s market capitalization was approximately ¥460 billion, meaning a successful buyout would likely provide a premium to current shareholders. The company’s stock price has remained roughly 13% below its pre-scandal levels.