Sakai Ovex : Announcement Concerning Commencement of a Tender Offer by Sakai Textile Co., Ltd. for the ShareCertificates, Etc. of SAKAI OVEX CO., LTD.

[Translation]
	July 27, 2021
To whom it may concern:
Company Name:	SAKAI OVEX CO., LTD.
(Code Number: 3408, the First Section of the Tokyo Stock Exchange)
Representative:	Shintaro Matsuki, President and
	Representative Director
Contact for inquiries:	Koichi Murosaka, General Manager of the
	Administration Division
	(TEL. [phone])
Company Name:	Sakai Textile Co., Ltd.
Representative:	Shintaro Matsuki, Representative Director

Announcement Concerning Commencement of aTender Offer by SakaiTextile Co., Ltd. for the Share

Certificates, Etc. of SAKAI OVEX CO., LTD. (Securities Code: 3408)

Sakai Textile Co., Ltd. hereby announces that, on July 27, 2021, it has decided to acquire the share certificates, etc., of SAKAI OVEX CO., LTD. through a tender offer as set forth in the attachment.

End

This material is published pursuant to Article 30, Paragraph 1, Item 4 of the Order for Enforcement of the Financial Instruments and ExchangeAct based on the request of Sakai Textile Co., Ltd. (the tender offeror) to SAKAI OVEX CO., LTD. (the target company of the tender offer).

(Attachment)

"Announcement Concerning Commencement of aTender Offer for the Share Certificates, Etc. of SAKAI OVEX CO., LTD. (Securities Code: 3408)", dated July 27 2021

	July 27, 2021
To whom it may concern:
Company Name:	Sakai Textile Co., Ltd.
Representative:	Shintaro Matsuki, Representative Director

Announcement Concerning Commencement of aTender Offer for the Share Certificates, Etc. of SAKAI OVEX CO., LTD. (Securities Code: 3408)

Sakai Textile Co., Ltd. ("Tender Offeror") hereby announces that, on July 27, 2021, the Tender Offeror has decided to acquire the common shares ("Target Company Shares") and the Share Options (as defined in "2 Class of Share Certificates, Etc. to be Purchased, Etc.," "(2) Share Options" below) of SAKAI OVEX CO., LTD. (Code Number: 3408, listed on the First Section of the Tokyo Stock Exchange, Inc. ("TSE"), the "Target Company") through a tender offer ("Tender Offer") pursuant to the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended).

The Tender Offeror is a stock company established by Shintaro Matsuki ("Mr. Matsuki"), Representative Director and President of the Target Company, on January 15, 2021, for the main purposes of acquisition and ownership of the Target Company Shares and Share Options through the Tender Offer. As of today, Mr. Matsuki owns 100% of the issued shares of the Tender Offeror and serves as Representative Director.As of today, theTender Offeror does not own the Target Company Shares or the Share Options. As disclosed in "Announcement Concerning Commencement of a Tender Offer for the Share Certificates, Etc. of SAKAI OVEX CO., LTD. (Securities Code: 3408)", dated February 9, 2021 (including the amendments described in "(Amendment) Announcement Regarding PartialAmendments to"Announcement Concerning Commencementof a Tender Offer for the Share Certificates, Etc. of SAKAI OVEX CO., LTD. (Securities Code: 3408)" Due to its Submission of Amendment of Tender Offer Registration Statement," dated February 10. 2021, and "Announcement Regarding PartialAmendments to "Announcement Concerning Commencement of a Tender Offer for the Share Certificates, Etc. of SAKAI OVEX CO., LTD. (Securities Code: 3408)" Due to the Change inTerms and Conditions of Tender Offer for the Share Certificates, Etc. of SAKAI OVEX CO., LTD.," dated March 18, 2021), as part of a series of transactions for the purpose of acquiring all of the Target Company Shares (includes shares issued upon the exercise of Share Options, but excludes the treasury shares owned by the Target Company) which are listed on the First Section of TSE and Share Options, delisting the Target Company Shares, and the Tender Offeror becoming the sole shareholder of the Target Company, the Tender Offeror conducted a tender offer (period for purchase etc. from February 9, 2021 through March 24, 2021, purchase etc. price 3,000 yen per share for Target Company Shares, one

1. yen per unit for Share Options, "Previous Tender Offer"), however it was unsuccessful since the minimum number of shares planned to be purchased in the PreviousTender Offer was 4,127,800 shares, and the total number of share certificates, etc. tendered in the Previous Tender Offer was 3,939,239 shares, which did not meet the minimum 4,127,800 shares.

As part of a seriesof transactions ( "Transactions") for thepurposeof acquiringallof theTargetCompany Shares (includes shares issued upon the exercise of Share Options, but excludes treasury shares owned by the Target Company, and theAgreed Non-tendering Shares (defined below, and the same shall apply hereinafter.) owned by

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the Target Company's largest shareholder City Index Eleventh Co., Ltd. (number of shares owned: 515,600 shares,

Ownership Ratio (Note 1): 8.33% , "CIE") which are listed on the First Section of TSE and Share Options, delisting the Target Company Shares, and theTender Offeror and the largest shareholder CIE becomingthe sole shareholders of theTarget Company (Note 2), the Tender Offeror has decided to conduct theTender Offer on July 27, 2021.

The Transactions fall under the category of a management buyout (MBO) (Note 3), and Mr. Matsuki plans to continue to manage the Target Company after the Transaction. There is no special agreement between the Tender Offeror and other Directors of the Target Company (including Audit and Supervisory Committee Members) regarding their appointment as officers after theTender Offer.

Note 1 "Ownership Ratio" is the ratio of Target Company Shares owned divided by the number of shares (6,191,133 shares) which is obtained by adding the number of Target Company Shares which are the subject of 313 units of Share Options (Note 4) listed in the Target Company's 128th Securities Report ("Target Company Securities Report") as of March 31, 2021 (31,300 shares), submitted by theTarget Company on June 28, 2021 (6,467,558 shares), to the total number of shares issued and outstanding in the Target Company Securities Report as of March 31, 2021 (6,436,258 shares), then deducting the number of treasury shares owned by the Target Company listed in the Target Company Securities Report as of March31, 2021 (276,425 shares) (rounded off totwo decimalplaces;thesame applies to Ownership Ratio hereinafter.)

Note 2 However, after the Tender Offer, in the event that there are shareholders who own equal shares or more than theAgreed Non-tendering Shares owned by CIE, theTender Offeror, CIE, and the said shareholders would have a consultation on the improvement of the corporate value of the Target Company and their respective roles ("Trilateral Consultation"). After careful and due consultation, if they fail to reach an agreement at the Trilateral Consultation, the Tender Offeror will consider another course, including making itself the sole shareholder of the Target Company, and CIE will support a decision made by the Tender Offeror.

Note 3 "Management buyout (MBO)" generally refers to a transaction where the management team of a target companycontributesall or partof theacquisition fundstopurchase theshares of the targetcompanybased on the premise of continuing the business of the target company.

Note 4 The table below shows the breakdown of 313 units of Share Options. The holders of Share Options are Directors and executive employees of theTarget Company. It is provided that the Share Option Holders may exercise their allotted Share Options on or after the day following the day when they lose their position as Director or Corporate Officer of theTarget Company, respectively, within the exercise period for Share Options.

Name of Share Options	Number of units as of March 31, 2021	Number of subject TargetCompany
	(units)	Shares (shares)
Series 1 Share Options	61	6,100
Series 2 Share Options	60	6,000
	2

Series 3 Share Options	96	9,600
Series 4 Share Options	96	9,600
Total	313	31,300

For conducting the Tender Offer, the Tender Offeror has executedan agreementwith CIE on July 27, 2021, under which CIE will not tender all the Target Company Shares owned (number of shares owned: 515,600 shares, Ownership Ratio: 8.33%, "Agreed Non-tenderingShares") in theTender Offer ("Non-TenderAgreement"). In addition to the above agreement, the Tender Offeror plans to conclude a shareholders' agreement in consultation with CIE separately, but as of today, the specific timing and details of the agreement have not been decided. For the outline of the Non-Tender Agreement and the matters that may be provided for in the shareholders' agreement, please see the tender offer registration statement ("Tender Offer Registration Statement") which the Tender Offeror submits in connection with the Tender Offer as of July 28, 2021, "No.1 Outline of the Tender Offer," "3. Purpose of Purchase, etc.," "(6) Important Agreements relating to the Tender Offer," "I Non-Tender Agreement" and "VI Others".

At the same time, the Tender Offeror has executed an agreement dated July 27, 2021, withToray Industries, Inc. (number of shares owned: 464,530 shares, Ownership Ratio: 7.50%, "Toray"), the second-largest shareholder of the Target Company. Also, it has executed the same dated July 26, 2021, with The Fukui Bank, Ltd. (number of shares owned: 165,000 shares, Ownership Ratio:2.67%, "Fukui Bank"), the tenth-largestshareholder of theTarget Company, under which Toray and Fukui Bank will tender all Target Company Shares owned, respectively, (total number of shares owned: 629,530 shares, total Ownership Ratio: 10.17%) in the Tender Offer (agreement with Toray "Tender Agreement (Toray)," and agreement with Fukui Bank "Tender Agreement (Fukui).") For an overview of these agreements, please see the Tender Offer Registration Statement, "No.1 Outline of the Tender Offer,""3. Purpose of Purchase, etc.,""(6) MaterialAgreements onthe Tender Offer," "II Tender Agreement (Toray)" and "III Tender Agreement (Fukui)".

In addition, theTender Offeror was informed from NIPPONACTIVE VALUE FUND PLC (number of shares owned: 389,800 shares, Ownership Ratio: 6.30%, "NAVF"), the forth-largest shareholder of theTarget Company, that it has supported theintent of theTransactions andis positively considering tendering allTarget Company Shares owned (number of shares owned: 389,800 shares, Ownership Ratio: 6.30%) in the Tender Offer.

The overview of theTender Offer is as follows:

1. Name of Target Company
   SAKAI OVEX CO., LTD.
2. Class of Share Certificates, Etc. to be Purchased, Etc.

(1) Common shares

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1. Share Options
2. 1. Share Options issued based on the resolution of the Board of Directors Meeting of the Target Company held on June 20, 2014 ("Series 1 Share Options.")

1. Share Options issued based on the resolution of the Board of Directors Meeting of the Target Company held on June 19, 2015 ("Series 2 Share Options.")

1. Share Options issued based on the resolution of the Board of Directors Meeting of the Target Company held on June 24, 2016 ("Series 3 Share Options.")

IV. Share Options issued based on the resolution of the Board of Directors Meeting of the Target Company held on June 23, 2017 ("Series 4 Share Options," and the Series 1 Share Options, the Series 2 Share Options, the Series 3 Share Options and the Series 4 Share Options are collectively referred to as "Share Options.")

3 Period for Purchase, Etc.

From July 28, 2021 (Wednesday) through September 8, 2021 (Wednesday) (30 business days)

4 Price for Purchase, Etc.

1. 3,810 yen per share of the common share
2. Share Options
   I. One (1) yen per unit of Series 1 Share Options

1. One (1) yen per unit of Series 2 Share Options

1. One (1) yen per unit of Series 3 Share Options

IV. One (1) yen per unit of Series 4 Share Options

5 Number of Share Certificates, Etc. to be Purchased

Class of Share	Number of shares to be	Minimum number of	Maximum number of
Certificates, Etc.	purchased	shares to be purchased	shares to be purchased
Common shares	5,675,533 (shares)	3,611,900 (shares)	－ (shares)
Total	5,675,533 (shares)	3,611,900 (shares)	－ (shares)

6 Settlement Commencement Date September 15, 2021 (Wednesday)

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