リクルートホールディングス（6098） – Recruit Holdings Announces Share Repurchase through Self Tender Offer

Recruit Holdings Announces Share Repurchase through Self Tender OfferTOKYO, JAPAN (January 28, 2022) – Recruit Holdings Co., Ltd. (TSE: 6098) (the “Company”)announced that its Board of Directors resolved today to conduct a share repurchase of its common stockof up to 34,000,000 shares through a tender offer (the “Self Tender Offer”) as the specific purchasemethod pursuant to Article 156, Paragraph 1 of the Companies Act as applied by replacing certain termspursuant to Article 165, Paragraph 3 of the said Act, and the provisions of the Company’s Articles ofIncorporation. The Self Tender Offer will be conducted at the purchase price of 4,581 yen, a 10%discount from the closing price of the Company’s common stock as of January 27, 2021, the businessday immediately preceding the date of the meeting of the Board of Directors resolving the Self TenderOffer, which has been previously agreed with a few Japanese business shareholders who intend toreduce their holdings of the Company’s common stock.The Company recognizes that there has been concern in the capital markets regarding the possibility ofuncoordinated sales by its Japanese business shareholders and the potential for downward pressure onits stock price. Previously, when the Company was notified that several of its shareholders intended toreduce their holdings, the Company conducted secondary equity offerings to provide these shareholderswith an opportunity to sell a large volume of shares at the same time in a coordinated manner.Recently, three Japanese business shareholders notified the Company of their intention to reduce theirthesestake in the Company’s common stock. The Company has considered the priorities ofshareholders, the potentialimpact on the Company’s share price from large uncoordinated sales ofshares over a short period, the capacity to pursue strategic business investments, the capital marketenvironment, and the outlook for its financial position and has determined it is appropriate to acquire itsown shares in accordance with the Company’s capital allocation policy. Upon examining multipletransaction alternatives,the Company has decided to acquire the shares from these shareholdersthrough the Self Tender Offer at the purchase price of 4,581 yen and has entered prospective tender offeragreements with the three Japanese business shareholders.The Self Tender Offer at a discounted price from the market price enables the Company to minimize thecash outflow of acquiring its own shares, while enhancing shareholder value.Outline of the Self Tender Offer(1) Class of Shares to be repurchasedCommon Stock of the Company(2) Method of the purchaseSelf Tender Offer(3) Purchase price4,581 yen (10% discount to the base price1)(4) Total number of shares to berepurchased34,000,000 shares (Maximum) (up to 2.06% of totalnumber of shares issued excluding treasury stock)(5) Total purchase price155,754 million yen (Maximum)(6) Self tender offer periodFrom Monday, January 31 toTuesday, March 1, 2022 (20 business days)(7) The prospective tendering shareholdersNTT DATA CORPORATION,HAKUHODO DY HOLDINGS INCORPORATED,TOKYO BROADCASTING SYSTEM TELEVISION, INC.1 5,090 yen, the closing price of the Company’s common stock as of January 27, 2022, the business dayimmediately preceding the date of the meeting of the Board of Directors resolving the Self Tender Offer.1limited to,telephone,The Self Tender Offer will not be conducted, directly or indirectly, in or targeted at the United States, northrough the U.S. postal mail services or other interstate or international commercial methods or means(including, but nottelex, facsimile, e-mail, and Internet communication), northrough any stock exchange facilities in the United States. No tender in the Self Tender Offer may bemade through any of the aforementioned methods or means, through those stock exchange facilities, orfrom the United States. In addition, neither the press releases related to the Self Tender Offer nor otherrelevant documents will, or may, be sent or distributed in, to, or from the United States by the postalmail services or other means. No tender in the Self Tender Offer that violates, directly or indirectly, anyofthe aforementioned restrictions will be accepted. No solicitation to purchase securities or otherequivalent instruments is being made to residents in the United States or within the United States. Evenif such securities or other equivalent instruments are sent to the Company by residents in the UnitedStates or from the United States, they will not be accepted.1. Purpose of the Share RepurchaseThe Company’s primary use of capital is to invest for its long-term business strategy in order to achievesustainable profit growth and increase enterprise value. The Company believes that this approach willcontribute to the common interests of shareholders. The Company also considers the return of capital toits shareholders to be an important part ofits capital allocation strategy. The Company strives tocontinuously pay stable dividends considering its long-term cash needs and financial position forecast.The provisions of the Company’s Articles of Incorporation provides that the Company can repurchaseshares of the Company through market sales pursuant to a resolution at the meeting of its Board ofDirectors pursuant to Article 165, Paragraph 2 of the Companies Act in order to make it possible toimplementflexible capital strategies in response to changes in the business environment and theCompany may consider implementing share repurchase programs, depending on the capital marketenvironment and the outlook of its financial position.For the fiscal year ended March 31, 2021, the Company paid a total annual dividend of 20.00 yen pershare, which consists of an interim dividend of 9.50 yen per share and a year-end dividend of 10.50 yenper share, based on a consolidated dividend payout ratio which had been set at approximately 30% ofprofit attributable to owners of the parent excluding non-recurring income/losses. For the fiscal yearending March 31, 2022, the Company paid an interim dividend of 10.50 yen per share based on theCompany’s current dividend policy which aims to continue to pay stable dividends, and plans to pay ayear-end dividend following its policy.In order to mitigate the impact on the balance of supply and demand of its shares in the aftermarket andto implement flexible capital policies in response to changes in the business environment, the Companyhas conducted share repurchases in conjunction with previously announced secondary offerings. TheCompany repurchased its common stock pursuant to the resolution at the meeting of the Board ofDirectors held on August 24, 2016 through the Tokyo Stock Exchange Trading Network Off-Auction OwnShare Repurchase Transaction System (ToSTNeT-3), which was the specific method of repurchasedetermined on August 24, 2016 (Period for the share repurchase: Friday, August 26, 2016; Total numberof shares repurchased: 7,643,300 shares (ownership ratio as of the share repurchase1: 1.35%); Totalpurchase price: 29,999,952,500 yen).In line with the capital allocation policy regarding sharerepurchases that considers the investment, dividend, strategic M&A, market environment and financialoutlooks announced on May 14, 2019,the Company conducted share repurchases following thesecondary offerings pursuant to the resolutions at the meetings of the Board of Directors held on August28, 2019 and November 30, 2020, upon consideration of multiple factors including the balance of supplyand demand of its shares in the aftermarket following the secondary offerings and enhancement of thereturn of capital to its shareholders. ((1) Share repurchase by market purchases on the Tokyo StockExchange,through an appointed securities dealer with investment discretion from Thursday,September 19, 2019 through Friday, November 29, 2019 (Total number of shares repurchased:Inc.2the share repurchase2: 1.33%); Total purchase price:22,259,600 shares (ownership ratio as of79,999,688,129 yen) and (2) Share repurchase by market purchases on the Tokyo Stock Exchange, Inc.through an appointed securities dealer with investment discretion from Monday, December 7, 2020through Friday, February 26, 2021 (Total number of shares repurchased: 15,157,100 shares (ownershipratio as of the share repurchase3: 0.91%); Total purchase price: 68,576,962,887 yen)).the date ofAt the end of October 2021, NTT DATA CORPORATION (“NTT Data”, the ninth largest shareholder ofthe announcement: 28,350,000 sharesthe Company, number of shares owned as of(ownership ratio4: 1.71 %)) notified the Company of its intention to sell 19,700,000 shares, which is aportion of its owned shares, held in the Company’s common stock (ownership ratio4: 1.19%) (the “SharesIntended to be Sold by NTT Data ”) resulting from an assessment of their cross-shareholdings, which areheld for the purpose of maintaining medium- to long-term relationships and to create synergy with clientsand business partners, while expanding trading volume, etc.Note:1 The percentage of shares of the number of shares in the Company (rounded down to the third decimalplace. The same shall apply to calculations of ownership ratio hereinafter.) of 564,777,539 shares,which is calculated by deducting the number of the Company’s treasury stock of 542,471 shares fromthe total number of the shares issued and outstanding of 565,320,010 shares as of June 30, 2016.2 The percentage of shares of the number of shares in the Company of 1,672,167,061 shares, which iscalculated by deducting the number of the Company’s treasury stock of 23,792,969 shares (which doesnot include the shares held in the Board Incentive Plan Trust (“BIP Trust”) (1,353,822 shares)) from thetotal number of the shares issued and outstanding of 1,695,960,030 shares as of June 30, 2019 .3 The percentage of shares of the number of shares in the Company of 1,650,711,397 shares, which iscalculated by deducting the number of the Company’s treasury stock of 45,248,633 shares (which doesnot include the shares held in BIP Trust (1,397,998 shares)) from the total number of the shares issuedand outstanding of 1,695,960,030 shares as of September 30, 2020 .4 The “ownership ratio” represents the percentage of owned shares of the number of shares in theCompany of 1,648,568,285 shares, which is calculated by deducting the number of the Company’streasury stock of 47,391,745 shares (which does not include the shares held in BIP Trust (1,719,165shares) or the shares held in an Employee Stock Ownership Plan Trust (“ESOP Trust”) (12,794,100shares), which is mainly for employees in the HR Technology Strategic Business Unit (“SBU”), which isa business segment in the Recruit Group (the Company, 324 consolidated subsidiaries of the Company,and 8 affiliated companies (as of December 31, 2021))), from the total number of the shares issued andoutstanding of 1,695,960,030 shares as of September 30, 2021 , which is described in “theConsolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2022(IFRS accounting standards)” released by the Company on November 15, 2021.In response to this, at the end of October 2021, the Company started considering possible measuresregarding the Shares Intended to be Sold by NTT Data. The Company recognizes that there has beenconcern in the capital markets regarding the possibility of uncoordinated sales by its Japanese businessshareholders and the resulting potential for downward pressure on its stock price. In order to addressthese concerns, the Company believes it is effective to provide an opportunity for multiple shareholdersto sell a substantial amount of the Company’s common shares in a coordinated manner, while alsoreducing the possibility of irregular market sales of the Company’s common shares by shareholders for acertain period of time. As one of the measures, the Company has organized coordinated equity offeringsthree times in the past (the secondary offerings pursuant to the resolution at the meeting of the Board ofDirectors held on August 24, 2016, August 28, 2019 and November 30, 2020) when many of theJapanese business shareholders reached the Company around the same time with their intention toreduce their holdings in the Company. Also, in order to mitigate the impact on the balance of supply anddemand of its shares in the aftermarket and to enhance shareholder return, the Company repurchasedits own shares.3Based on the Company’s intention to create an opportunity for orderly sales of the Company’s shareswith consideration for NTT Data’s intention and as a result of considering several factors including thepotential for downward pressure on the Company’s share price from large uncoordinated sales of sharesover a short period, its capital allocation policy, its capacity to pursue strategic business investmentsmainly for its HR Technology business which operate online HR platforms in the HR Matching marketand for continuous growth of its existing business, the capital market environment, and the outlook for itsfinancial position,in early November 2021, the Company concluded that purchasing of the SharesIntended to be Sold by NTT Data through a share repurchase would be the most appropriate measure.With regard to the specific method for purchasing the Shares Intended to be Sold by NTT Data, theCompany concluded that the most appropriate method was a purchase through a self tender offer, whichprovides the opportunity for shareholders other than NTT Data to participate in the tender offer. TheCompany believes this is the most appropriate method from the viewpoint of equitable treatment ofshareholders, transparency of transactions, maximizing the certainty to sell all of the Shares Intended tobe Sold by NTT Data through a repurchase at a price representing a certain discount to the market price,as well as, minimizing the cash outflow of the Company as much as possible. As described above, wehave conducted share repurchases in conjunction with the secondary offerings with the purpose ofmitigating the impact on the balance of demand and supply of the Company’s common shares as a resultof the secondary offerings together with improving shareholder return. Previously, we have conductedshare repurchases at the market price. However, a self tender offer enables the Company to repurchaseits common shares at a discounted price from the market price. Therefore, the Company believes thatthe total number of shares to be tendered will not exceed the planned number of tendered shares, andas a result, the Company determined that it is appropriate to use the tender offer method in order toincrease the certainty of the sale of Shares Intended to be Sold by NTT Data. Additionally, in determiningthe purchase price for the Self Tender Offer (the “Tender Offer Price”), considering that the Company’scommon shares are listed on financial instruments exchanges, the Company emphasizes the clarity andobjectivity of the criteria and has decided to place emphasis on the market price of the Company’scommon shares. The Company also determined that it was desirable to purchase tendered shares at aprice representing a certain discount to the market price, from the perspective of enhancing shareholdervalue as well as minimizing the cash outflow of the Company as much as possible.Based on the above considerations and decisions, in the middle of December 2021, the Company askedNTT Data whether it would intend to tender its shares if the Company made a tender offer at a pricerepresenting a certain discount to the market price of the Company’s common shares on the FirstSection of the TSE.to the simple average ofThe Company also decided that the appropriate price of the Company’s common stock forming the basisofthe discount rate would be desirable to be determined by taking into account the market pricefluctuations during a certain period. The Company notified NTT Data that it was intending to make atender offer at a price representing a discounttheCompany’s common shares on the First Section of the TSE during the one-month or three-month periodending the business day immediately preceding the date of the meeting of the Board of Directorsresolving the Self Tender Offer or the closing price of the Company’s common shares on the First Sectionof the TSE on the business day immediately preceding the date of the meeting of the Board of Directorsresolving the Self Tender Offer. For this decision, the Company referred to previous examples of tenderoffers for repurchasing shares at a discounted market price during the period from January 2021 toNovember 2021 which shows out of 13 examples, 11 were calculated using either of the above options,and therefore determined that it is appropriate to select these as a possible measure to determine thetender price.the closing price ofTo determine the discount rate, the Company considered that the higher the discount rate, the higher theprobability that the market price will not fall below the Tender Offer Price during the Self Tender Offerperiod (hereinafter,the “Self Tender Offer Period”). A market price below the Tender Offer Priceminimizes the probability that the total number of tendered shares will exceed the planned number of4tendered shares and increases the certainty of the sale of Shares Intended to be Sold by NTT Data andminimizes the cash outflow of the Company as much as possible. However, NTT Data would not likelyagree on an unreasonably high discount rate. In order to determine a reasonable discount rate, we havedecided to refer to previous examples of tender offers for repurchasing shares. The Company referred toprevious examples of tender offers for repurchasing shares at a discounted market price during theperiod from January 2021 to November 2021 which shows 8 out of 13 examples are around a 10%discount. The Company decided that a discount around 10% to the market price would be desirabletaking into account the market price fluctuations during a certain period as the market price may fluctuateon a daily basis due to economic conditions and various other factors, pursuing the certainty of the saleof the Company’s common shares by shareholders who apply for the Self Tender Offer and reducing thepossibility that the market price falls below the Tender Offer Price as well as minimizing the cash outflowof the Company as much as possible, and the Company notified NTT Data to that effect. In response tothis, the Company received NTT Data’s intention to apply the Shares Intended to be Sold by NTT Datafor the Self Tender Offer.(“TBS”,the Company’s common stock,INC.In addition, as the trend of earnest action towards enhancing corporate governance in recent years hasincreased and in the course of discussion with its Japanese business shareholders, who have heldcommon shares of the Company since before listing on the First Section of the TSE and have businessrelationships with the Company, regarding appropriate sales of the Company’s common stock andthe Companyconfirming their holding policy and intention to sellapproached TOKYO BROADCASTING SYSTEM TELEVISION,the 12th largestshareholder (September 30, 2021); number of shares owned as of the date of the announcement:24,997,500 shares (ownership ratio: 1.51%)) and HAKUHODO DY HOLDINGS Inc. (“Hakuhodo”, thethe22th largest shareholder (September 30, 2021); number of shares owned as ofannouncement: 10,710,000 shares (ownership ratio: 0.64 %)) about applying for the Self Tender Offer inthe middle of December 2021 (NTT data, Hakuhodo DY Holdings Inc. and Tokyo Broadcasting SystemTelevision, Inc. collectively the “Prospective Tendering Shareholders”) and a tender offer Price at a pricerepresenting a discount around 10% to the simple average of the closing prices of the Company’scommon shares on the First Section of the TSE during the one-month or three-month period ending thebusiness day immediately preceding the date of the meeting of the Board of Directors resolving the SelfTender Offer or the closing price of the Company’s common shares on the First Section of the TSE onthe business day immediately preceding the date of the meeting of the Board of Directors resolving theSelf Tender Offer. The Company received Hakuhodo’s intention to tender 5,355,000 shares held in theCompany’s common stock (ownership ratio : 0.32%) in order to improve asset efficiency and strengthenfinancial position at the end of December 2021 and TBS’ intention to tender 1,500,000 shares held in theCompany’s common stock (ownership ratio: 0.09%) in order to provide a source of strategic investmentto be made by TBS in early January 2022,(the number of shares intended to be sold by ProspectiveTendering Shareholders collectively called the “Shares intended to be Sold”).the date ofIn response to this, after further consultations with the Prospective Tendering Shareholders,theCompany proposed to make a tender offer at 4,581 yen, a 10% discount from the closing price of theCompany’s common shares on the First Section of the TSE on the business day immediately precedingthe date of the meeting of the Board of Directors resolving the Self Tender Offer, January 27, 2022. TheCompany decided that the appropriate price of the Company’s common stock forming the basis of thediscount rate would be desirable to be determined by reflecting the most recent financial results in thestock price, and as such the Company notified the Prospective Tendering Shareholders that it wasintending to make a tender offer at 4,581 yen, a 10% discount from the closing price of the Company’scommon shares on the First Section of the TSE on the business day immediately preceding the date ofthe meeting of the Board of Directors resolving the Self Tender Offer (January 27, 2022) instead of usingthe simple average of the closing prices of the Company’s common shares during the one-month orthree-month period ending January 27, 2022 in order to pursue increased certainty of the sale of theCompany’s common shares by shareholders who apply for the Self Tender Offer and reducing thepossibility that the market price falls below the Tender Offer Price as well as minimizing the cash outflowthe Company as much as possible. On the same day, the Prospective Tendering Shareholdersof5consented to the fact that, in the event that the Company conducts the Self Tender Offer under suchconditions, the Prospective Tendering Shareholders will apply for the Self Tender Offer.As a result, on January 28, 2022, the Company entered into tender offer agreements with NTT Data,Hakuhodo and TBS, respectively, indicating that NTT Data would tender 19,700,000 shares (ownershipratio: 1.19%), Hakuhodo would tender 5,355,000 shares (ownership ratio: 0.32%) and TBS would tender1,500,000 shares (ownership ratio: 0.09%), a portion of their ownership interests in the Company’s stock,for the Self Tender Offer.for the tender offer agreementIn the tender offer agreements for NTT Data and Hakuhodo, there is no prerequisite for tendering theirfor TBS, (i) the representations and warranties5 of theshares but,Company are true and accurate in significant points and (ii) the Company has not materially breachedthe obligations6 prescribed in the tender offer agreements are prerequisite for TBS to tender its ownshares. The Company received an explanation from the Prospective Tendering Shareholders that theycurrently intend to continue holding its common shares other than Shares Intended to be Sold (8,650,000shares (ownership ratio: 0.52%) of NTT Data, 5,355,000 shares (ownership ratio: 0.32%) of Hakuhodoand 23,497,500 shares (ownership ratio: 1.42%) of TBS). If the shares tendered in the Self Tender Offer (“Tendered Shares”) in aggregate exceeded the planned number of shares to be purchased, the SelfTender Offer will be implemented in accordance with the proportional allocation method specified inArticle 27-22-2, Paragraph 2 of the Financial Instruments and Exchange Act applicable pursuant toArticle 27-13, Paragraph 5 and with Article 21 of the Cabinet Ordinance. The Company has received anexplanation from NTT Data that with regard to any portion of the Shares Intended to be Sold by NTTData which are not purchased it will consider possible options including selling them. However, it isundecided if or when the sale will be carried out and the potential sale method is undecided. TheCompany received an explanation from Hakuhodo and TBS that they have not decided as to whetherthey will sell the portion of the Shares Intended to be Sold by them which are not purchased if TenderedShares in aggregate exceeded the planned number of shares to be purchased and part of the SharesIntended to be Sold were not purchased.After the above considerations and consultations, the Company has resolved at the meeting of its Boardof Directors held on January 28, 2022 to conduct a repurchase of its own shares with a tender offer torepurchase its own shares as the specific purchase method pursuant to Article 156, Paragraph 1 of theCompanies Act as applied by replacing certain terms pursuant to Article 165, Paragraph 3 of the said Actand the provisions of the Company’s Articles of Incorporation. The Company has resolved at the meetingof its Board of Directors held on January 28, 2022 to conduct a repurchase of its own shares and make atender offer at a price representing an approximate 10% discount to the closing price of the Company’scommon shares on the First Section of the TSE on January 27, 2022.The Company also has resolved that the planned number of shares to be repurchased should be up to34,000,000 shares (ownership ratio: 2.06%) in order to provide other shareholders the opportunity to selltheir shares owned, while considering its capital allocation policy,its capacity to pursue strategicbusiness investments mainly for HR Technology business which operate online HR platform in the HRMatching market and for continuous growth of existing business, the capital market environment, and theoutlook for its financial position. The Company has considered that it is appropriate to set the totalrepurchase amount not exceeding around 200 billion yen. The Company also has resolved at the Boardof Directors meeting held on January 28, 2022 that the planned number of shares to be repurchasedshould be up to 34,000,000 shares7 (ownership ratio: 2.06%), for providing other shareholders thetheir shares owned and considering the Company’s capital allocation policy, itsopportunity to sellcapacity to pursue strategic business investments mainly for HR Technology business which operateonline HR platforms in the HR Matching market and for continuous growth of its existing business, thecapital market environment, and the outlook for its financial position.6Note:5 In the tender offer agreement with TBS, the representations and warranties of the Company (i) theexecution and performance of the tender offer agreement by the Company are not in violation of lawsand regulations, etc., and all procedures required by laws and regulations, etc., the Company’s articlesof incorporation, and other internal rules have been completed for the execution and performance of thetender offer agreement, (ii) the Company has not filed a petition for the commencement of bankruptcyproceedings, etc., and (iii) the Company is not subject to the state of insolvability or suspension ofpayment.6 Under the tender offer agreement with TBS, the Company bears the obligation to conduct the SelfTender Offer and the obligation to provide indemnification.7 The planned number of shares to be repurchased (34,000,000 shares) was calculated with the simpleaverage of the closing price of the Company’s common shares during the period from January 4 toJanuary 12, 2022, in order to determine the number by January 13, 2022 for practical reasons.The Company plans to allocate its own funds to the Self Tender Offer for the full amount. The Company’sconsolidated liquidity on hand (cash and cash equivalents) as of September 30, 2021 amounted to589,981 million yen and, after the Company repurchases its shares, the Company’s consolidated liquidityon hand exceeds the 5 year average liquidity on hand from the fiscal year ended March 2017 to the fiscalyear ended March 2021 (simple average of 414,045 million yen in cash and cash equivalents at the endof the last 5 fiscal years) and furthermore the Company’s Free Cash Flow from business operations (thesum of cash flows from operating activities and cash flows from investment activities) for the fiscal yearended March 2021 is 246,224 million yen. The Company considers that it will be able to secure sufficientliquidity on hand even after allocating funds for the Self Tender Offer by accumulating cash to begenerated from its business. In addition, the Company concluded a 200 billion yen commitment lineagreement on March 31, 2021 with financial institutions to further prepare for liquidity risk. As of the dateof submission ofthere is no outstanding loan execution balance based on thecommitment agreement. We believe that this will ensure sufficient liquidity even in the event of a majorchange in the business environment. Therefore, as liquidity is ensured in accordance with normalbusiness operations, we believe that there are no issues with financial soundness or safety.this document,The policy on the disposal of treasury stock acquired through the Self Tender Offer has not yet beendetermined as of the date of submission of this document; however, it may be used for strategic M&Awith the Company’s common stock as consideration, for the delivery of shares upon the exercise of stockacquisition rights, and for stock compensation using the Company’s common stock for employees of theGroup (The Company and its subsidiaries).2. Details of the Board of Directors Resolution Concerning the Own-Share Repurchase(1) Details of the ResolutionType of SharesTotal Number of SharesAggregate Purchase AmountCommon shares34,000,100 shares(Maximum)155,754,458,100 yen(Maximum)Note:1 Total number of shares issued and outstanding 1,695,960,030 shares (as of January 28, 2022. Theincrease in the number of shares issued as a result of the exercise of the Company’s stock acquisitionrights from January 1, 2022 to today is not included.)2 Up to 2.00% of total number of shares issued and outstanding3 Acquisition period From January 31 to March 31, 2022(2) Publicly-Traded Securities Relating to the Company’s Own Shares Previously AcquiredPursuant to the ResolutionNot applicable73. Summary of the Self Tender Offer(1) Time TableDate of Board ofDirectors resolutionDate of public notice ofcommencement of theSelf Tender Offer BidDate of submission ofSelf Tender Offer Bid noticeSelf Tender Offer PeriodFriday, January 28, 2022Monday, January 31, 2022Announcement shall be made electronically with notice to thateffect in the Nihon Keizai Shimbun.(URL for electronic announcement:https://disclosure.edinet-fsa.go.jp/ )Monday, January 31, 2022From Monday, January 31 to Tuesday, March 1, 2022 (20business days)(2) Repurchase Price4,581 yen per share of common stock(3) Basis for Calculation of the Repurchase Pricea. Basis of the CalculationIn determining the Tender Offer Price, considering that the Company’s common shares are listedon financial instruments exchanges, the Company emphasizes the clarity and objectivity of thecriteria, and has decided to place emphasis on the market price of the Company’s commonshares. The Company also determined that it was desirable to purchase tendered shares at aprice representing a certain discount to the market price, from the perspective of shareholdervalue as well as minimizing the cash outflow of the Company as much as possible.Based on the above considerations and decisions,theCompany asked NTT Data whether it would intend to tender its shares if the Company made atender offer at a price representing a certain discount to the market price of the Company’scommon shares on the First Section of the TSE.in the middle of December 2021,The Company also decided that the appropriate price of the Company’s common stock formingthe basis of the discount rate would be desirable to be determined by taking into account themarket price fluctuations during a certain period. The Company notified NTT Data that it wasintending to make a tender offer at a price representing a discount to the simple average of theclosing price of the Company’s common shares on the First Section of the TSE during theone-month or three-month period ending the business day immediately preceding the date of themeeting of the Board of Directors resolving the Self Tender Offer or the closing price of theCompany’s common shares on the First Section of the TSE on the business day immediatelypreceding the date of the meeting of the Board of Directors resolving the Self Tender Offer. Forthis notification, the Company considers that 11 of 13 recent publicly disclosed examples werecalculated based on one of these methods, and determined that it is appropriate to select theseas possible measures.To determine the discount rate, the Company considered that the higher the discount rate, thehigher the probability that the market price will not fall below the Tender Offer Price during theSelf Tender Offer period. A Tender Offer Price below the market price minimizes the probabilitythat the total number of tendered shares will exceed the planned number of tendered shares andincreases the certainty of the sale of Shares Intended to be Sold by NTT Data, while minimizingthe cash outflow of the Company as much as possible. However, NTT Data would not likelyagree on an unreasonably high discount rate. In order to determine a reasonable discount rate,8we have decided to refer to previous examples of tender offers for repurchasing shares. TheCompany referred to previous examples of tender offers for repurchasing shares at a discountedmarket price during the period from January 2021 to November 2021 which showed 8 out of 13examples with a discount around 10%. The Company decided that a discount around 10% to themarket price would be desirable to be determined by taking into account the market pricefluctuations during a certain period, as the market price may fluctuate on a daily basis due toeconomic conditions and various other factors, with the intention of pursuing the certainty of thesale of the Company’s common shares by shareholders who apply for the Self Tender Offer andreducing the possibility thatthe market price falls below the Tender Offer Price as well asminimizing the cash outflow of the Company as much as possible. The Company notified NTTData to that effect. In response to this, the Company received NTT Data’s intention to apply theShares Intended to be Sold by NTT Data for the Self Tender Offer.In addition, as the trend of earnest action towards enhancing corporate governance in recentyears has increased and in the course of discussion with its Japanese business shareholders,who have held common shares of the Company since before listing on the First Section of theTSE and have business relationships with the Company, regarding appropriate sales of theCompany’s common stock and confirming their holding policy and intention to selltheCompany’s common stock, the Company approached to TBS and Hakuhodo about applying forthe Self Tender Offer in the middle of December 2021. The Company received Hakuhodo’sintention to tender 5,355,000 shares held in the Company’s common stock in order to improveasset efficiency and strengthen financial position (ownership ratio : 0.32%) in the end ofDecember 2021 and TBS’ intention to tender 1,500,000 shares held in the Company’s commonstock in order to provide a source of strategic investment to be made by TBS (ownership ratio :0.09%) in early January 2022.As a result, on January 28, 2022, the Company entered into tender offer agreements with NTTData, Hakuhodo and TBS, respectively. The Tender Offer Price of 4,581 yen is equivalent to theprice representing a 10.00% discount (rounded down the third decimal place. The same shallapply to calculations of discount rate hereinafter) to 5,090 yen, which is the closing price of theCompany’s common shares on January 27, 2022, the business day immediately preceding thedate of the meeting of the Board of Directors resolving the Self Tender Offer (January 28, 2022),equivalent to the price representing a 27.04% discount to 6,279 yen, which is the simple averageof the closing prices of the Company’s common shares for the one-month period ending the dateand equivalent to the price representing a 34.01% discount to 6,942 yen, which the simpleaverage of the closing prices of the Company’s common shares for the three-month periodending the date and equivalent to the price representing a 32.30% discount to 6,767 yen, whichis the simple average of the closing prices of the Company’s common shares for the six-monthperiod ending the date.Pursuant to the resolution of the Board of Directors meeting held on November 30, 2020, theCompany completed a share repurchase (total number of shares acquired: 15,157,100 shares(ownership ratio at the time of acquisition: 0.91%), total acquisition price: 68,576,967,887 yen) bymarket purchases on the Tokyo Stock Exchange, Inc. through an appointed securities dealerwith investment discretion from Monday, December 7, 2020 through Friday, February 26, 2021.The simple average purchase price per share was 4,524 yen (rounded to the nearest yen).There is a difference of 57 yen from the tender offer price of 4,581 yen, but this difference wasdetermined based on the market price on each purchase date. The Company was intending tomake a tender offer at 4,581 yen, a 10% discount from the closing price of the Company’scommon shares on the First Section of the TSE on January 27, 2022, which is 5,090 yen and12.51 % (round down to the 3rd decimal place) premium to 4,524 yen.9b. Background to the CalculationIn determining the Tender Offer Price, considering that the Company’s common shares are listedon financial instruments exchanges, the Company emphasizes the clarity and objectivity of thecriteria and has decided to place emphasis on the market price of the Company’s commonshares. The Company also determined that it was desirable to purchase tendered shares at aprice representing a certain discount to the market price, from the perspective of enhancing　shareholder value as well as minimizing the cash outflow of the Company as much as possible.Based on the above considerations and decisions,theCompany asked NTT Data whether it would intend to tender its shares if the Company made atender offer at a price representing a certain discount to the market price of the Company’scommon shares on the First Section of the TSE.in the middle of December 2021,The Company also decided that the appropriate price of the Company’s common stock formingthe basis of the discount rate would be desirable to be determined by taking into account themarket price fluctuations during a certain period. The Company notified NTT Data that it wasintending to make a tender offer at a price representing a discount to the simple average of theclosing prices of the Company’s common shares on the First Section of the TSE during theone-month or three-month period ending the business day immediately preceding the date of themeeting of the Board of Directors resolving the Self Tender Offer or the closing price of theCompany’s common shares on the First Section of the TSE on the business day immediatelypreceding the date of the meeting of the Board of Directors resolving the Self Tender Offer. Forthe Company referred to previous examples of tender offers for repurchasingthis decision,shares at a discounted market price during the period from January 2021 to November 2021which shows out of 13 examples, 11 were calculated based on either of the above options, andtherefore determined that it is appropriate to select these as a possible measure to determine thetender price.To determine the discount rate, the Company considered that the higher the discount rate, thehigher the probability that the market price will not fall below the Tender Offer Price during theSelf Tender Offer period. A Tender Offer Price below the market price minimizes the probabilitythat the total number of tendered shares will exceed the planned number of tendered shares andincreases the certainty of the sale of Shares Intended to be Sold by NTT Data while minimizingthe cash outflow of the Company as much as possible. However, NTT Data would not likelyagree on an unreasonably high discount rate. In order to determine a reasonable discount rate,we have decided to refer to previous examples of tender offers for repurchasing shares. TheCompany referred to previous examples of tender offers for repurchasing shares at a discountedmarket price during the period from January 2021 to November 2021 which shows 8 out of 13examples are around a 10% discount. The Company decided that a discount around 10% to themarket price would be desirable by taking into account the market price fluctuations during acertain period as the market price may fluctuate on a daily basis due to economic conditions andvarious other factors, pursuing the certainty of the sale of the Company’s common shares byshareholders who apply for the Self Tender Offer and reducing the possibility that the marketprice falls below the Tender Offer Price as well as minimizing the cash outflow of the Companyas much as possible and the Company notified NTT Data to that effect. In response to this, theCompany received NTT Data’s intention to apply the Shares Intended to be Sold by NTT Datafor the Self Tender Offer.In addition, as the trend of earnest action towards enhancing corporate governance in recentyears has increased and in the course of discussion with its Japanese business shareholders,who have held common shares of the Company since before listing on the First Section of theTSE and have business relationships with the Company, regarding appropriate sales of thetheCompany’s common stock and confirming their holding policy and intention to sell10Company’s common stock, the Company approached to TBS and Hakuhodo about applying forthe Self Tender Offer in the middle of December 2021. The Company was received Hakuhodo’sintention to tender 5,355,000 shares held in the Company’s common stock (ownership ratio :0.32%) in order to improve asset efficiency and strengthen financial position in the end ofDecember 2021 and TBS’ intention to tender 1,500,000 shares held in the Company’s commonstock (ownership ratio: 0.09%) in order to provide the source of strategic investment to be madeby TBS in the early of January 2022.the Company’s common shares on the First Section ofIn response to this, after further consultations with the Prospective Tendering Shareholders, theCompany proposed to make a tender offer at 4,581 yen, a 10% discount from the closing pricesofthe TSE on the business dayimmediately preceding the date of the meeting of the Board of Directors resolving the SelfTender Offer January 27, 2022. The Company decided thattheCompany’s common stock forming the basis of the discount rate would be desirable to bedetermined by reflecting the most recent financial results in the stock price, and as such theCompany notified the Prospective Tendering Shareholders that it was intending to make a tenderoffer at 4,581 yen, a 10% discount from the closing price of the Company’s common shares onthe First Section of the TSE on the business day immediately preceding the date of the meetingof the Board of Directors resolving the Self Tender Offer (January 27, 2022) instead of using thesimple average of the closing prices of the Company’s common shares during the one-month orthree-month period ending January 27, 2022 in order to pursue increased certainty of the sale ofthe Company’s common shares by shareholders who apply for the Self Tender Offer andreducing the possibility thatthe market price falls below the Tender Offer Price as well asminimizing the cash outflow of the Company as much as possible.the appropriate price ofAs a result, on January 28, 2022, the Company entered into tender offer agreements with NTTData, Hakuhodo, and TBS, respectively.After the above considerations and consultations, the Company has resolved at the meeting ofits Board of Directors held on January 28, 2022 to conduct a repurchase of its shares and makea tender offer at a price representing an approximate 10% discount to the closing prices of theCompany’s common shares on the First Section of the TSE on the business day immediatelypreceding the date of the meeting of the board of directors resolving the Self Tender Offer(January 27, 2022).(4) Planned Number of Shares to be PurchasedType of SharesPlanned Number ofShares to bePurchasedExpected Number ofExcess SharesTotalCommon shares34,000,000 shares–34,000,000 shares1 If the total number of shares tendered does not exceed the planned number of shares to be purchased(34,000,000 shares), the Company will purchase all tendered shares. If the total number of sharestendered exceeds the planned number of shares to be purchased (34,000,000 shares), the Companywill not purchase all or some ofimplement delivery-versus-paymentthe excess portion and willsettlement with regard to the share certificates in accordance with the proportional allocation methodspecified in Article 27-22-2, Paragraph 2 of the Financial Instruments and Exchange Act (Law No. 25 of1948, as amended; referred to as the “Act”) applicable pursuant to Article 27-13, Paragraph 5 and withArticle 21 of the Cabinet Ordinance on Disclosure of Tender Offer Bids for Publicly-Traded StockCertificates, etc. by the Issuer (Ministry of Finance Ordinance No. 95 of 1994, as amended).2 Fractional shares shall be subject to the Self Tender Offer. In the case where a shareholder exercisesthe right to demand purchase of fractional shares pursuant to the Companies Act, the Company will11purchase its own shares during the Self Tender Offer Period in accordance with the proceduresspecified by law.(5) Funds Necessary for the Purchase155,793,000,000 yen11 The amount of funds necessary for the purchase is the total of the estimated purchase proceeds(155,754,000,000 yen), purchase procedure fees, and various expenses for announcements relatingto the Self Tender Offer and printing expenses for Self Tender Offer explanatory documents andother necessary documents.(6) Settlement Method and Commencement Datea. Name of the financialinstruments broker or bank that will perform settlement relating to thepurchase and address of its main branchMitsubishi UFJ Morgan Stanley Securities Co., Ltd. 1-9-2 Otemachi, Chiyoda-ku, Tokyo, Japan(the “Tender Offer agent”)b. Settlement Commencement DateThursday, March 24, 2022c. Settlement MethodPromptly after the end of the Self Tender Offer Period, notice of purchase pursuant to the SelfTender Offer will be sent to tendering shareholders (in the case of a foreign shareholder, theshareholder’s standing proxy) at their address or location.Purchases will be made in cash. The amount equal to the purchase proceeds relating to thepurchased share certificates less applicable withholding taxes (see note) will be remitted by theTender Offer agent to the location specified by the tendering shareholder (in the case of a foreignshareholder, the shareholder’s standing proxy) without delay after the settlement commencementdate in accordance with instructions from the tendering shareholder (in the case of a foreignshareholder, the shareholder’s standing proxy).Individual Shareholdersi. In the case where the tendering shareholder is a resident or a non-resident with apermanent domestic establishment1If the amount of money received for tendering and delivering shares pursuant tothe Self Tender Offer exceeds the amount of the portion corresponding to theshares that are the basis of the delivery included in the Self Tender Offeror’scapital (in the case of a consolidated corporation, the amount of consolidatedcapital; same hereafter)the purchase price per share exceeds thepurchaser’s capital per share), the amount of the excess portion is deemed to bedividends and is subjectthe amount of the moniesto taxation. Furthermore,received for tendering and delivering shares pursuant to the Self Tender Offerminus the amount deemed to be dividends is income from the transfer of shares. Ifthere is no amount that is deemed to be dividends (i.e., the purchase price pershare is no more than the Tender Offeror’s capital per share), all of the moniesreceived for tendering and delivering shares pursuant to the Self Tender Offer isincome from the transfer of shares.(i.e.,to withholding equalto 20.315%The portion considered dividends is subject(15.315% in income taxes and the Special Reconstruction Income Tax under theAct on Special Measures concerning Securing Financial Resources Necessary forImplement Measures for Reconstruction in Response to the Great East JapanEarthquake (Law No. 117 of 2011,as amended; referred to as the “SpecialReconstruction Income Tax”) and 5% in residenttaxes; nonresidents with apermanent domestic establishment are specially exempt from the 5% residentin the case where a shareholder is a largetax); provided, however,that12shareholder specified in Article 4-6-2, Paragraph 37 of the Order for Enforcementofthe Act on Special Measures Concerning Taxation(Cabinet Order No.43 of1957,as amended) (“Large Shareholder, etc.”), 20.42% of the payment is withheld(income tax and Special Reconstruction Income Tax only). In addition, the amountof income from the transfer of shares minus acquisition expenses relating to theshares is in principle subject to separate self-assessment taxation.In the case where shares in a tax-free account (“Tax-Free Account”) specified inArticle 37-14 ofthe Special Taxation Measures Act (Law No.26 of 1957,asamended) (tax-free status of income from transfers relating to small amounts ofpublicly-traded shares in Tax-Free Accounts) are tendered pursuant to the SelfTender Offer and the financial instruments broker with which the tax-free accountwas opened is Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., income fromthe transfer of shares pursuant to the Self Tender Offer is in principle tax free. Ifthe tax-free account was opened with a financial instruments broker other thanthe treatment describedMitsubishi UFJ Morgan Stanley Securities Co., Ltd.,above may not apply.ii. In the case where the tendering shareholder is a non-resident without a permanentdomestic establishment1The amount deemed to be dividends is subject to 15.315% withholding (income taxthe shareholder is a majorand Special Reconstruction Income Tax only).shareholder,to 20.42% withholding(income tax and Special Reconstruction Income Tax only). Further, income arisingfrom the transfer of shares is in principle not subject to taxation in Japan.then the deemed dividends are subjectIfCorporate Shareholders1In the case where a tendering shareholder is a corporate shareholder, if theamount of money received for tendering and delivering shares pursuant to the SelfTender Offer exceeds the amount of the portion corresponding to the shares thatare the basis of the delivery included in the Self Tender Offeror’s capital (i.e., thepurchase price per share exceeds the purchaser’s capital per share), the amountofthe excess portion is deemed to be dividends and is subject to 15.315%withholding (income tax and Special Reconstruction Income Tax only).Foreign shareholders (here and hereafter, shareholders who are residents of a foreign countryspecified in an applicable tax treaty (including corporate shareholders)) who wish to have theincome tax and Special Reconstruction Income Tax on the deemed dividend amount reduced orexempted pursuant to an applicable tax treaty must inform the Tender Offer agent by March 1,2022 that written notice regarding the tax treaty will be submitted and submit the notice to theTender Offer agent by the business day (March 23, 2022) immediately prior to the paymentcommencement date.11 Imposition of taxes on shares purchased pursuant to the Self Tender Offer. Please consult withyour tax accountant or other professional concerning specific tax related questions and makeyour own determinations.(7) Othera. The Self Tender Offer is not conducted in the United States or for the United States, eitherdirectly or indirectly, and is not conducted by means of U.S. mail or other interstate orinternational commerce methods or means (including, but nottelex,facsimile, electronic mail and internet communications), and moreover, is not conducted throughany securities exchange facility in the United States. The Self Tender Offer may not besubscribed through any ofthrough theaforementioned facilities, or from the United States.the aforementioned methods or means, ortelephone,limited to,13Furthermore, this document and related documents regarding the Self Tender Offer are not sentto or distributed and may not be sent or distributed in the United States or from the United Statesby means of mail or any other method. The Company will not accept any subscriptions to theSelf Tender Offer that directly or indirectly violate the aforementioned restrictions.Subscribing shareholders and other relevant parties (standing proxies in case offoreignshareholders) are requested to make the following representations and warranties to the TenderOffer agent when tendering shares pursuant of the Self Tender Offer.Subscribing shareholders and other relevant parties: (i) are not in the United States at the time ofsubscription and submission of the tender offer subscription; (ii) have not received or sent anyinformation regarding the Self Tender Offer (including any copies), directly or indirectly, in theUnited States, to the United States, or from the United States; (iii) have not used, directly orindirectly, any U.S. mail, other interstate or international commercial methods or meansfacsimile, electronic mail and internet(including, but notcommunications), and securities exchange facilities in the United States, when signing anddelivering any offer or tender offer subscription forms; and (iv) do not act as any other party’sagent, trustee or mandatary without discretionary power (except when such other party gives allinstructions regarding the offer from the outside of the United States).limited to,telephone,telex,b. The Company entered into tender offer agreements with NTT Data, Hakuhodo, and TBS,respectively, indicating that NTT Data would tender 19,700,000 shares (ownership ratio : 1.19%)and Hakuhodo would tender 5,355,000 shares (ownership ratio : 0.32%), TBS would tender1,500,000 shares (ownership ratio : 0.09%), a portion oftheir ownership interests in theCompany’s stock, for the Self Tender Offer. (see 1. Purpose of the Repurchase)c. The Company plans to publish the financial results for the third quarter of the fiscal year endingMarch 2022 and submit the quarterly report for the third quarter of the fiscal year ending March2022 by February 14, 2022.ReferenceTreasury stock held as of December 31, 2021Total number of shares outstanding (excluding treasury stock) 1,648,568,285 sharesTotal number of shares of Treasury stock147,391,745 shares1 Treasury stock does not include the shares held in the Bord Incentive Plan trust (1,719,165 shares)and the shares held in an equity-settled Employee Stock Ownership Plan (ESOP) trust (12,794,100shares)IR Contact:Tokyo Investor Relations – Recruit_HD_IR@r.recruit.co.jphttps://recruit-holdings.com/ir/This press release is not an offer to sell or a solicitation of any offer to buy the securities of RecruitHoldings Co., Ltd. in the United States or elsewhere. The securities referenced in this press release havenot been, and will not be, registered under the United States Securities Act of 1933, as amended (the”Securities Act”). The securities may not be offered or sold in the United States absent registration or anexemption from registration under the Securities Act. The securities will not be publicly offered or sold inthe United States.14