Digital Hearts Holdings, the Tokyo-listed game-debugging and enterprise QA group, is heading toward the exit from public markets. Its board has endorsed a tender offer from Sandbox, an acquisition vehicle wholly owned by the company's own chairman, and is telling shareholders to sell in.
Sandbox will pay ¥1,060 for each Digital Hearts share, a price the board says beats the top of the market-price valuation range and sits within the range produced by a discounted cash flow analysis. That price also carries a 40.96% premium to the ¥752 close the day before the announcement, and premiums of 43.05% and 43.44% over the stock's one-month and three-month average closes respectively, though the premium narrows to 31.68% against the six-month average. Sandbox was set up on July 13, 2026, for the sole purpose of this deal, and its only shareholder is Digital Hearts chairman and top holder Eiichi Miyazawa, who already controls 42.27% of the company's shares.
The buyout math assumes no dividend
The tender offer's economics rest on a specific condition: Digital Hearts will pay no dividend at all for the year ending March 2027. The board revised its earlier forecast of ¥25.00 per share, split between a ¥12.50 interim payment and a ¥12.50 year-end payment, down to zero for both, contingent on the tender offer succeeding. The board also resolved to abolish its shareholder benefit program from the same fiscal year, again conditional on completion of the deal. The disclosure is explicit that the buyout price itself was set on the assumption that shareholders would forgo this year's payout, so the dividend cut is not an incidental side effect. It is baked into how Sandbox arrived at ¥1,060.
| Term | Detail |
|---|---|
| Offer price | ¥1,060 per common share |
| Offeror | Sandbox, wholly owned by chairman Eiichi Miyazawa |
| Tender period | August 7, 2026 to September 24, 2026 (31 business days) |
| Minimum shares sought | 5,922,743 shares (26.56% of shares outstanding) |
| Maximum shares sought | No upper limit |
| Premium to prior-day close | 40.96% over ¥752 |
| Premium to 1-month average | 43.05% |
| Premium to 3-month average | 43.44% |
| Premium to 6-month average | 31.68% |
| FY2027 dividend forecast | Revised to ¥0.00, from ¥25.00, conditional on deal completion |
| Shareholder benefit program | To be abolished from FY2027, conditional on deal completion |
Why the buyout, and why now
Digital Hearts had been preparing a spin-off listing of its enterprise-software subsidiary AGEST since 2023, but pulled that plan this year as investors turned wary of IT valuations amid rapid AI-driven change. The company's MBO filing frames the buyout as a way to pursue AI-related R&D, acquisitions and business-model changes without the quarterly scrutiny that comes with a public listing. A special committee of three independent directors reviewed the deal, ran four rounds of price negotiation with Miyazawa that lifted the offer from an initial ¥900 to the final ¥1,060, and concluded the price and process were fair to minority shareholders.
The tender offer runs from August 7 to September 24, 2026, 31 business days, longer than the 20-day legal minimum. The companies say the extended window is meant to give room for a rival bidder to emerge, though the disclosure does not indicate whether one has. Sandbox set a minimum purchase threshold of 5,922,743 shares, equivalent to 26.56% of shares outstanding, but no upper limit, since the goal is full privatization rather than a partial stake. Miyazawa himself will tender only 500,000 of his 9,425,633 shares, keeping the rest out of the offer so he retains a direct stake after the deal closes.
What happens if the offer succeeds
If shareholders clear the minimum threshold, Digital Hearts expects to be delisted from the Tokyo Stock Exchange's Prime Market. The company plans a follow-on share consolidation to squeeze out remaining minority holders, who would receive cash calculated at the same ¥1,060-per-share rate, and Sandbox intends to fund the roughly ¥14.85 billion transaction cost partly through borrowing from Mizuho Bank. None of that is finished business: the dividend cut, the abolition of shareholder perks and the delisting itself all depend on the tender offer actually clearing its share threshold by the September 24 deadline.