News Release

Notification with Respect to Commencement of Tender Offer for Shares of Toyama Chemical Co., Ltd.

February 13, 2008
FUJIFILM Holdings Corporation

FUJIFILM Holdings Corporation (the "Company" or the "Tender Offeror") resolved, at the meeting of the Board of Directors held on February 13, 2008, to acquire the common stock and the stock acquisition rights of Toyama Chemical Co., Ltd. (the "Target Company") (Stock code: 4518, the First Section of the Tokyo Stock Exchange) through a tender offer (the "Tender Offer"). In connection with such resolution, we would like to provide notice of the following.

1. Purpose of the Tender Offer

(1) Background and Reason of the Tender Offer

The Tender Offeror is a holding company of FUJIFILM Group, which operates two major operating companies: FUJIFILM Corporation ("FUJIFILM") and Fuji Xerox Co., Ltd. The Tender Offeror became a holding company after conducting an incorporation-type split in October 2006, in which FUJIFILM assumed all of the businesses of the Tender Offeror. FUJIFILM also holds a very important position in terms of the business strategy of the Tender Offeror.

FUJIFILM Group regards the present time as its period of "Second Foundation", in which it is making radical changes to its business structure through proactive measures based on the basic policies of the medium-term management plan, "VISION75". As a result of implementing large-scale structural reforms in the photography-related business over the last few years, and at the same time concentrating management resources on priority businesses fields, FUJIFILM Group expects to achieve a record high income in the fiscal year ending March 31, 2008. FUJIFILM Group has also set a target of 3.15 trillion yen in revenues and 250 billion yen or more in operating income for the fiscal year ending March 31, 2010, which is the final year of its "VISION75" medium-term management plan. While continuing to pursue its "VISION75" medium-term management plan, FUJIFILM Group is also discussing the next strategic approach from a mid- to long-term standpoint that will allow FUJIFILM Group to further enhance its business. FUJIFILM's Medical Systems/Life Sciences Business, with a strong track record and a broad knowledge base in areas such as medical digital X-ray imaging and diagnostic systems, medical-use picture archiving and communications systems, endoscopes and systems designed for the laboratory testing of blood, has been actively strengthening capital investment and research and development initiatives and promoting M&A among the priority businesses in the above-mentioned medium-term management plan. As part of FUJIFILM's growth strategy for the mid- to long-term, FUJIFILM is promoting strategic development in new businesses through the expansion of its Medical Systems/Life Sciences Business in the "prevention" and "treatment" areas in addition to the previously targeted "diagnostic" area. In addition, because such strategic development will enhance the corporate value of the Tender Offeror, as a launching pad for the strategy the Tender Offeror has considered entering into a strategic partnership with an entity with which the Tender Offeror can expect technological synergies with its wholly owned subsidiary FUJIFILM and with whom there is high potential for growth.

The Target Company considers itself a "company that creates a culture of health" and has been conducting corporate activities under its unique corporate philosophy, "the creation of health culture with live science*", since its establishment. As a research and development-oriented company, the Target Company's management goal is "to contribute to the further development of global health care through new drug development". The Target Company is establishing a system which will continuously develop candidate compounds for global-standard new drugs by promoting the improvement of its strengths, which are its research and development and production technology capabilities. From its background of excellent research and development capabilities in fields such as infectious diseases, the Target Company has, compared to other companies of the same scale in that industry, promising new drug candidates such as antiviral agents, agents for the treatment of Alzheimer disease and anti-rheumatoid arthritis agents in the development pipeline, and has achieved many proven results by introducing products which it has developed for global companies. In addition, in 2002 the Target Company entered into a capital alliance with Taisho Pharmaceutical Co., Ltd., ("Taisho") a major shareholder of the Target Company as of the date of this press release, pursuant to which it established a joint company Taisho Toyama Pharmaceutical Co., Ltd. ("Taisho Toyama") responsible for sales of pharmaceuticals to the domestic market in Japan, and pursuant to which it has conducted a business alliance including actions such as the transfer of rights to sell general use pharmaceuticals and the joint development of pharmaceuticals. However, amid radical changes to the competitive structure of the market in recent years, such as the full-scale entry of foreign pharmaceutical companies into the Japanese market, and the rapid progress of state-of-the-art technology including genomic science, among others, the Target Company's funding needs with respect to long-term research and development have been increasing.

*Live science:
A phrase created to express the Target Company's philosophy that its activities are based not only on research activities in "life science" but also on its aim to offer, first and foremost, a healthy and lively lifestyle to all and to thereby enable everyone to lead a lively working life.

Taisho's mission is to contribute to society by creating and offering superior pharmaceuticals and health-related products, as well as healthcare-related information and services in socially responsible ways that enrich people's lives by improving health and beauty. Guided by this fundamental philosophy since its establishment in 1912, Taisho is working towards expanding its operations and aims to become a pharmaceutical manufacturer capable of covering a variety of needs from enhancing health and preventive measures and treatment. Taisho's main business encompasses manufacturing and sales of over-the-counter (OTC) drugs and health-related products, and research and development, manufacturing and sales of prescription pharmaceuticals (collectively, the "Pharmaceutical Business"), in which it has been striving to develop unique new global-standard pharmaceuticals, as well as focusing on efficiency in research and development through alliances with leading manufacturers. Examples of such activities include the sale of an originally developed macrolide antibiotic agent "Clarith" sold in more than 130 countries throughout the world, the peripheral vasodilator "Palux" and the nonsteriodal antiphlogistic analgetic "Lorcam". As mentioned above, in October 2002 Taisho established Taisho Toyama, a joint venture with the Target Company, which further strengthened its business by standardizing the sales function of prescription pharmaceuticals of both Taisho and the Target Company. However, the pharmaceutical business environment has become increasingly severe due to National Health Insurance price revisions, a policy of moderation in health care costs such as promoting use of generic products, and increasing competition with foreign pharmaceutical companies in the prescription pharmaceutical market in Japan. In addition, with continuing expirations of patents for successful products, it has been increasingly difficult to create revolutionary drugs that meet medical needs, and the increase in research and development expenses have affected revenues of pharmaceutical companies.

Amidst the severe business environment and guided by the above-mentioned fundamental philosophy, Taisho considers the Pharmaceutical Business to be its most important business and has been engaged in various business activities to maximize corporate value. Accordingly, under these circumstances, Taisho concluded that it is necessary to strengthen its capital relationship with the Target Company in order to overcome significant global competition and that closer ties with the Target Company will enhance the corporate value of both companies.

The Tender Offeror, together with FUJIFILM, will expand its Medical Systems/Life Sciences Business into the treatment field, as mentioned above, through a strategic business alliance with the Target Company, which, as a research-and-development oriented company, has shown results in fields such as infectious diseases. The expansion will allow the Tender Offeror, together with FUJIFILM, to make a full-scale entry into the ethical pharmaceutical business and, together with the existing operating companies, FUJIFILM RI Pharma Co., Ltd. (which operates the radio-pharmaceuticals business) and FUJIFILM FINECHEMICALS CO., LTD. (which operates the pharmaceutical substances and pharmaceutical intermediaries business), will enable them to establish a comprehensive healthcare company covering all three fields of "prevention", "diagnosis" and "treatment" through strategic development in new business domains. In addition, the Target Company will be provided with various unique technologies which FUJIFILM has accumulated over the years through its photography business (such as various diagnostic technologies, analysis technologies, nano-level emulsification and diffusion technologies, thin-film formation technologies, precision synthesis technologies, RI-labeled antibody technologies and collagen technologies), as well as human resources and management resources of the FUJIFILM Group companies, such as manufacturing technologies and development capabilities. Accordingly, the Target Company can expect to strengthen its development pipeline of new drugs and expect clinical trial periods to shorten. The Target Company will also be able to develop new drugs by applying FUJIFILM's unique FTD (Formulation, Targeting, Delivery) technologies such as nano particilization through FUJIFILM's diffusion technologies. In the difficult business environment in which the need for substantial research and development expenditures and time will increase, the Target Company can strengthen its management base and maximize its corporate value by having the Tender Offeror and Taisho hold 100% of the shares of the Target Company (66% and 34% respectively), and make prompt and effective decisions with respect to its management and investments. Furthermore, the Target Company can substantially improve its profitability and expect to make leaps towards becoming a leading pharmaceutical manufacturer for specified ailments by obtaining capital support (including the Third Party Allocation of New Shares, described below, which will be allocated to the Tender Offeror and Taisho) for research and development costs and capital expenses relating to the manufacturing of pharmaceutical substances, manufacturing support including self-manufactured items which are otherwise ordered from outside suppliers, and establishment of disaster risk diversification systems, and sales support including the expansion of sales in Japan through Taisho Toyama, based on the cooperation of Taisho, and the establishment of overseas sales systems using the FUJIFILM Group's overseas sales networks to the maximum extent possible. In particular, in order to prepare for a pandemic involving a new type of influenza, which is said to be a matter of time, the FUJIFILM Group, Taisho and the Target Company each intend to fulfill their roles to the best of their abilities in order to respond to this social mission and ensure the early development and stable supply of T-705 (antiviral drug), which the Target Company is currently developing.

After considering the above mentioned factors, the Tender Offeror, Taisho and the Target Company engaged in consultations and negotiation with respect to the possibility of the Tender Offeror's capital participation in the Target Company, and a possible future alliance of FUJIFILM Group and Taisho holding 66% and 34%, respectively, of the voting rights in the Target Company. On February 13, 2008, the Tender Offer, Taisho and the Target Company reached an agreement to the effect that (i) the Tender Offeror will conduct the Tender Offer pursuant to the conditions agreed upon by the parties, and that Taisho will continue to hold the 43,000,000 shares of the Target Company that Taisho owns, without tendering them in the Tender Offer, (ii) in order for the Target Company to raise approximately 20 billion yen for clinical development costs and research for the creation of new drugs such as T-817MA (agents for the treatment of Alzheimer disease), T-705 (antiviral drug) and T-2307 (antifungal drug), and approximately 10 billion yen for costs relating to manufacturing facilities for these new drugs, the Tender Offeror and Taisho will subscribe for a total of 43,925,000 new shares in the Target Company pursuant to a third party allocation of new shares of common stock to be implemented by the Target Company (the "Third Party Allocation of New Shares"), (iii) after the Tender Offer, the Tender Offeror will conduct the transaction described below in "(3) Matters Related to the Second-Step Takeover", by which the Tender Offeror will, in conjunction with Taisho, acquire all of the issued and outstanding shares of the Target Company (excluding treasury shares), and (iv) in order for Taisho to hold 34% of the Target Company's voting rights, the Tender Offeror will, pursuant to the relevant laws and regulations, transfer some of the shares of the Target Company which it will own (the "Transfer", and (i) through (iv) being, collectively, the "Transaction"), among others, and entered into a basic agreement (the "Agreement"). Please refer to Item (2) of "(1) Agreements between Tender Offeror and Target Company or its Directors and Officers" under "(4) Other Matters" below for details of the Agreement.

At the meeting of the Board of Directors held on February 13, 2008, the Target Company resolved to issue shares through a Third Party Allocation of New Shares (43,925,000 shares of common stock, at 683 yen per share, for an aggregate total of approximately 30 billion yen). The subscription date for the Third Party Allocation of New Shares will be February 28, 2008. Of the total of 43,925,000 shares to be issued pursuant to the Third Party Allocation of New Shares, 28,990,000 shares will be allocated to the Tender Offeror and 14,935,000 shares will be allocated to Taisho. As a result, the Tender Offeror will hold shares representing 102,180 voting rights (42.57 % of the voting rights after the Third Party Allocation of New Shares is effected), which represents the total of (i) the number of shares acquired by the Tender Offeror through the Tender Offer (73,190,000 shares) and (ii) the number of shares of the Target Company which the Tender Offeror is scheduled to acquire through the Third Party Allocation of New Shares (28,990,000 shares). Taisho will hold 57,935 voting rights (24.13% of the voting rights after the Third Party Allocation of New Shares is effected), which represents the total of (i) the Taisho Shares (43,000,000 shares) and (ii) the number of shares of the Target Company which Taisho is scheduled to acquire through the Third Party Allocation of New Shares (14,935,000 shares). In total, the Tender Offeror and Taisho will hold 160,115,000 shares in aggregate (66.70% of the Target Company's voting rights after the Third Party Allocation of New Shares is effected).

The Tender Offeror is commencing the Tender Offer in order to acquire the remaining shares of the Target Company which are neither already held by Taisho nor held as treasury shares by the Target Company (including those shares which are issued, or may be issued upon the exercise of the stock acquisition rights before the last day of the Tender Offer Period) and all of the stock acquisition rights that were granted by the Target Company ("Stock Acquisition Rights"). If the Tender Offeror and Taisho acquire all of the shares of the Target Company through the Third Party Allocation of New Shares during the period in which the Tender Offer and other transactions will be conducted, and the Tender Offeror acquires the remaining stock of the Target Company not already held by Taisho or held as treasury stock by the Target Company in the Tender Offer, the Tender Offeror will hold 75.87% of the voting rights in the Target Company, and Taisho will hold 24.13% of the voting rights. Subsequently, the Tender Offeror intends that the FUJIFILM Group will hold 66% of the voting rights in the Target Company, and Taisho will hold 34% of the voting rights.

At the meeting of the Board of Directors held on February 13, 2008, as a result of careful consideration, the eight members of the Board of Directors of the Target Company (including four outside directors) who participated in the discussions and resolution resolved unanimously to approve the Tender Offer. From the perspective of ensuring the fairness of the resolution to approve the Tender Offer, Akira Ohira, the Representative Director of Taisho, a special related party to the Tender Offeror, did not participate in the discussions or the resolution.

(2) Management Policy after the Acquisition of Control

Based on the Agreement, the Tender Offeror, together with FUJIFILM, plans to continue to engage in detailed discussions with the Target Company and Taisho regarding the overall management of the Target Company pursuant to the terms of the Agreement. Specifically, pursuant to the terms of the Agreement, the Tender Offeror plans to discuss with Taisho and the Target Company (i) providing funds needed by the Target Company for clinical development costs and research for the creation of new drugs such as T-817MA (agents for the treatment of Alzheimer disease), T-705 (antiviral drug) and T-2307 (antifungal drug), and costs relating to manufacturing facilities for these new drugs, through the Third Party Allocation of New Shares, (ii) other fund raising for the Target Company by the Tender Offeror and Taisho, which will be conducted pursuant to a separate agreement, (iii) granting FUJIFILM Group and Taisho the right to appoint directors to the Target Company's board, and other potential changes to the composition of the Board of Directors of the Target Company, and (iv) implementing other measures in order to maximize synergies between the FUJIFILM Group, Taisho and the Target Company, among others.

(3) Matters Relating to the Second-Step Takeover

If the Tender Offeror is unable to acquire all of the remaining shares of the Target Company not already held by Taisho or held as treasury shares by the Target Company, based on the results of the Tender Offer and upon discussion with Taisho, the Tender Offeror plans to gain control of the Target Company through the methods described below.

Specifically, after the completion of the Tender Offer, the Tender Offeror plans to request that the Target Company hold a meeting of shareholders with an agenda pursuant to which the Target Company will (i) amend the Articles of Incorporation of the Target Company to change the Target Company into a Corporation Issuing Class Shares (Shurui-Kabushiki Hakko Gaisha, the "Corporation Issuing Class Shares") as defined in the Company Law of Japan (the "Company Law"), (ii) amend the Articles of Incorporation of the Target Company to attach to all shares of common stock issued by the Target Company a provision for acquisition of common stock (such shares, "Fully Acquirable Class Shares"), and (iii) deliver to shareholders a separate class of shares of the Target Company in exchange for acquisition of all the shares of common stock to which a provision for acquisition of common stock is attached (provided, however, that a listing application is not scheduled to be made). The Tender Offeror and Taisho plan to approve each of the above items at the aforementioned meeting of shareholders.

If each of the above procedures is implemented, all the shares of common stock issued by the Target Company will be acquired by the Target Company after being converted into Fully Acquirable Class Shares, and the shareholders of the Target Company will, in exchange, receive a separate class of shares of the Target Company as consideration. However, for shareholders of the Target Company who are entitled to shares of a separate class which constitute less than a whole share, the cash amount to be obtained by selling the total number of such fractional shares (if the total is a fractional number, such fractional number will be truncated) will be delivered to the shareholders pursuant to the relevant laws and regulations. The selling price of the total number of fractional shares (and the amount of cash to be delivered to the relevant shareholders subsequent to the sale) will be calculated based on the purchase price of the Tender Offer, barring exceptional circumstances. In addition, although the class and number of shares of the Target Company to be delivered to shareholders of the Target Company in consideration for Fully Acquirable Class Shares have not been determined as of the date of this press release, the Tender Offeror intends that the number of shares to be delivered in exchange for the Fully Acquirable Class Shares that will be delivered to shareholders of the Target Company who did not tender their shares in the Tender Offer (except Taisho) will be a fractional number constituting less than one share in order to enable the Tender Offeror and Taisho to gain complete control of the Target Company. With respect to procedure (ii) described above, the Company Law stipulates that to protect the rights of minority shareholders, (a) when the Articles of Incorporation are amended in order to change all common stock into Fully Acquirable Class Shares, as mentioned above in (ii), that a shareholder has the right to demand that the shares he or she holds be purchased in accordance with the provisions of Article 116 and 117 of the Company Law, and other related legislation, and (b) once the delivery of a separate class of share in exchange for the acquisition of the Fully Acquirable Class Shares is resolved at the meeting of shareholders, that a shareholder may petition for the determination of the price of Fully Acquirable Class Shares in accordance with the provisions of Article 172 of the Company Law and other related legislation. Because the purchase price and the equity value of the methods mentioned above in (a) and (b) will be ultimately determined by a court, they may differ from the purchase price. In making a demand or petition under these measures, it is the responsibility of each shareholder to confirm the required procedures and to make the relevant determination of whether to proceed.

The Tender Offer is not meant as an inducement to gain the approval of the shareholders of the Target Company at the aforementioned meeting of shareholders.

Dependent upon factors such as the shareholding ratio of the shares and other securities of the Target Company by the Tender Offeror and Taisho after the Tender Offer, the ownership of the shares of the Target Company by shareholders of the Target Company other than the Tender Offeror and Taisho, and the interpretation of the authorities of the related legislation, the Tender Offeror may request the Target Company to implement methods differing from, but having the same effect as, the procedures mentioned above; provided, however, that in any such case, the Tender Offeror will request a method by which the Tender Offeror will ultimately deliver cash to the shareholders of the Target Company in order to take complete control of the Target Company. In such a case, the amount of money to be delivered to the shareholders of the Target Company will be calculated based on the purchase price, barring exceptional circumstances. The details of the resolutions and procedures described above will be publicly disclosed through the stock exchanges as soon as they have been decided upon following discussions between the Target Company and Taisho.

If all of the Stock Acquisition Rights have not been acquired by the Tender Offeror despite the completion of the Tender Offer, the Tender Offeror may request that the Target Company effect the necessary procedures to cancel the Stock Acquisition Rights, and the Target Company may effect the necessary procedures in response to such request.

(4) Expectation of Delisting and Reasons

The common stock of the Target Company is, at the time of this press release, listed on the Tokyo Stock Exchange Group Inc. (the "Tokyo Stock Exchange"). However, because the Tender Offeror has not limited the maximum number of shares which the Tender Offeror will purchase through the Tender Offer, if the shareholding of the Target Company triggers the delisting standards of the Tokyo Stock Exchange as a result of the Tender Offer, the shares of the Company may be mandatorily delisted pursuant to the delisting standards of the Securities Listing Regulations of the Tokyo Stock Exchange (the "Delisting Standards"). Regardless of the foregoing, because the Tender Offeror and Taisho are planning to take complete control of the Target Company after the Tender Offer has been completed, the shareholding of the Target Company will trigger the Delisting Standards and the Target Company will be delisted. If the shares of the Target Company are delisted, the shares of the Target Company will not be traded on the Tokyo Stock Exchange and will be difficult to sell in the future.

(5) Reasons to Seek Delisting

The Tender Offeror, together with Taisho, aims to improve the corporate value of the Target Company in the medium- to long-term. Accordingly, the Tender Offeror concluded that a capital relationship by which it could implement specific measures to improve the corporate value would be beneficial, and therefore the Tender Offeror decided to implement the Transaction, including the Tender Offer, which is being conducted with the aim of delisting the Target Company's shares from the Tokyo Stock Exchange.

The Tender Offeror, in order to protect the interests of minority shareholders of the Target Company, is intending to take control of the Target Company through the method described above in "(3) Matters Relating to the Second-Step Takeover" while providing an opportunity for shareholders of the Target Company to sell their shares to an entity other than the Tender Offeror and Taisho. During the process of gaining control of the Target Company, the money which the Tender Offeror and Taisho will deliver to shareholders other than the Tender Offeror and the Target Company will be calculated based on the purchase price of the Tender Offer, barring exceptional circumstances.

(6) Material Agreements between the Tender Offeror and Shareholders of the Target Company with Respect to Tendering Shares in the Tender Offer, and Transfer to Third Parties

As stated above in "(1) Background and Reason of Tender Offer", the Tender Offeror, the Target Company and Taisho have entered into the Agreement, pursuant to which is understood that Taisho will not tender its Target Company shares in the Tender Offer.

Furthermore, as stated above in "(1) Background and Reason of Tender Offer", in early 2009 at the latest, the Tender Offeror plans to transfer some of the shares of the Target Company that it holds to Taisho (the "Transfer"), pursuant to the relevant laws and regulations, at a price which is substantially similar to the purchase price of the Tender Offer. The Transfer will be implemented in order to ensure that Taisho holds 34% of the voting rights in the Target Company, through the combination of the shares of the Target Company which it owns and the shares which will be transferred to it by the Tender Offeror. As a result of the Transfer, the Tender Offeror will hold up to 66% of the voting rights in Target Company, and Taisho will hold 34% of the voting rights. At the time of the issuance of this press release, there is no capital relationship between the Tender Offer and Taisho, and at the time of the issuance of this press release Taisho holds 43,000,000 shares of the Target Company.

Description of Taisho

(1) Description of Taisho

a. Trade Name Taisho Pharmaceutical Co., Ltd.
b. Business Description Manufacture and sales of general and prescription pharmaceuticals, quasi-drugs and food, among others
c. Date of Incorporation May 5, 1928
d. Address of Head Office 3-24-1, Takada, Toshima-ku, Tokyo
e. Name and Title of Representative Akira Uehara
President
f. Paid-in Capital 29,804 million yen
g. Major Shareholders and Shareholding Ratio Uehara Memorial Foundation.
13.42%
Shoji Uehara
11.43%
Sumitomo Chemical Co., Ltd.
3.79%
Northern Trust Company (AVFC) Sub-account American Client (Standing Proxy: The Hong Kong and Shanghai Banking Corporation Limited, Tokyo Branch)
3.53%
Sumitomo Mitsui Banking Corporation
3.12%
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
3.12%
Uehara Museum of Modern Art Foundation
3.12%
Mellon Bank Treaty Clients Omnibus (Standing Proxy: The Bank of Tokyo-Mitsubishi UFJ, Ltd.)
2.66%
Akira Uehara
2.23%
Kajima Corporation
1.72%

2. Description of Tender Offer

(1) Description of the Target Company

a. Trade Name Toyama Chemical Co., Ltd.
b. Business Description Pharmaceutical, production, purchase and sale of healthcare products
c. Date of Incorporation November 15, 1936
d. Address of Head Office 2-5, Nishi-Shinjuku 3-chome, Shinjuku-ku, Tokyo
e. Name and Title of Representative Masuji Sugata
President
f. Paid-in Capital 22,400 million yen (as of September 30, 2007)
g. Major Shareholders and Shareholding Ratio Taisho Pharmaceutical Co., Ltd.
21.80%
Hokuriku Bank, Ltd.
3.79%
Sumitomo Mitsui Banking Corporation
2.53%
Taisei Corporation
2.38%
Nakano Kosan Co., Ltd.
1.71%
Tokio Marine & Nichido Fire Insurance Co., Ltd.
1.66%
Asahi Kasei Corporation
1.53%
Trust & Custody Services Bank, Ltd. (Pension Trust Account)
1.49%
Goldman Sachs International (Standing Proxy: Goldman Sachs Japan Co., Ltd.)
1.19%
The Master Trust Bank of Japan Ltd. (Trust Account)
1.15%
(Note) The information with respect to the "Description of Target Company" is extracted from the 109th Semi-Annual Securities Report submitted by the Target Company to the Kanto Local Finance Bureau on December 14, 2007.
h. Relationship between the Tender Offeror and the Target Company Capital relationship
None
Personal relationship
None
Transactional relationship
None
Status of relationship with related parties
None

(2) Tender Offer Period

a. Period at time of filing of Registration Statement

From Tuesday, February 19, 2008 through Tuesday, March 18, 2008 (21 business days in Japan).

b. Possible extension of the Tender Offer Period based on Target Company's request

If the Target Company submits an opinion report requesting an extension of the acceptance period of the tender offer (the "Tender Offer Period") pursuant to Article 27-10, Paragraph 3 of the Financial Instruments and Exchange Law (the "Law"), the Tender Offer Period shall be extended to 30 business days, until Tuesday, April 1, 2008.

(3) Purchase Price of the Tender Offer

Common Stock:   880 yen per share
Stock Acquisition Rights:
  a. Stock acquisition rights that were granted pursuant to the resolution of the ordinary general meeting of shareholders of the Target Company held on June 24, 2005 ("Series 1 Stock Acquisition Rights")
1 yen per unit
  b. Stock acquisition rights that were granted pursuant to the resolution of the management meeting of the Target Company held on July 31, 2006 ("Series 2 Stock Acquisition Rights")
1 yen per unit
  c. Stock acquisition rights that were granted pursuant to the resolution of the management meeting of the Target Company held on July 30, 2007 ("Series 3 Stock Acquisition Rights")
1 yen per unit

(4) Basis of Calculation for Purchase Price of the Tender Offer

a. Basis of Calculation

(1) Common Stock

When determining the purchase price for shares of the Target Company in the Tender Offer, the Tender Offeror referred to the share valuation report (the "Share Valuation Report") prepared by Nomura Securities Co., Ltd. ("Nomura Securities"), its financial advisor.

Nomura Securities conducted a valuation of the shares of the Target Company using the average market price method and the discounted cash flow method (the "DCF method"). According to the Share Valuation Report, the ranges of the per share value of common stock of the Target Company (the "Common Stock") that were derived from the above-mentioned valuation methods are as follows. The results of the calculation conducted using the DCF method includes the synergy effects expected to result from the Tender Offer:

  • the average market price method: between 639 yen and 706 yen
  • the DCF method: between 746 yen and 1,091 yen

Taking into account premiums paid by third party offerors in precedent tender offers, and considering the results of the Share Valuation Report, the Tender Offeror considered the appropriate per share purchase price for the Common Stock to be between 639 yen, the minimum value derived from the average market price method, and 1,091 yen, the maximum value derived from the DCF method. In addition to the results of the share valuation conducted by Nomura Securities, in pricing the Tender Offer, the Tender Offeror considered the results of the operational, legal, accounting, tax-related and environmental due diligence, premiums paid in precedent tender offers, the possibility of approval by the Target Company of the Tender Offer, trends in the market price of the Common Stock and the forecasts of the Tender Offer. Accordingly, the Tender Offeror ultimately determined that the purchase price of the Tender Offer shall be 880 yen per share.

The purchase price is equal to (i) the average closing price of 697 yen (rounded to the nearest whole number) of the Common Stock quoted on the first section of the Tokyo Stock Exchange for the past 3 months ending on February 12, 2008 plus a premium of approximately 26.26% (rounded to the nearest hundredth of a percent) or (ii) the closing price of 631 yen of the Common Stock quoted on the first section of the Tokyo Stock Exchange on February 12, 2008 plus a premium of approximately 39.46%.

(2) Stock Acquisition Rights

The Stock Acquisition Rights of the Target Company were granted as stock options to its Directors and Executive Officers. The exercise price of each Stock Acquisition Right of the Target Company is 1 yen per share of Common Stock. With respect to the Series 1 through Series 3 Stock Acquisition Rights, it is understood that (i) such Stock Acquisition Rights may only be exercised upon the occurrence of certain events, such as when the person to whom the Stock Acquisition Rights were granted leaves the Target Company at the end of his term, or other similar events, and (ii) because transfer restrictions are attached to the Stock Acquisition Rights, the Tender Offeror cannot exercise the rights even if the Tender Offeror purchases the Stock Acquisition Rights through the Tender Offer. The Tender Offeror determined the purchase prices for the Stock Acquisition Rights based on these considerations.

b. Background of Calculation

The Tender Offeror had discussed the possibility of a capital alliance with the Target Company since April 2007. As a result of these discussions, the Tender Offeror concluded that acquiring a majority of the voting rights of the Target Company and making the Target Company a consolidated subsidiary was the best strategy to enhance the corporate value of the Tender Offeror in the medium- to long-term, and thus entered into more specific negotiations and discussions with the Target Company.

To assist it in its determination of the purchase price for Common Stock in the Tender Offer, the Tender Offeror obtained the Share Valuation Report from Nomura Securities on February 12, 2008. Nomura Securities conducted a valuation of the Common Stock using the average market price method and the DCF method. According to the Share Valuation Report, the ranges of the value per share that were derived from the above-mentioned valuation methods are as follows. The results of the calculation conducted using the DCF method includes the synergy effects expected to result from the Tender Offer:

  • the average market price method: between 639 yen and 706 yen
  • the DCF method: between 746 yen and 1,091 yen

Taking into account premiums paid by third party offerors in precedent tender offers and considering the results of the Share Valuation Report, the Tender Offeror considered the appropriate per share purchase price for the Tender Offer to be between 639 yen, the minimum value derived from the average market price method and 1,091 yen, the maximum value derived from the DCF method.

Furthermore, as a result of giving comprehensive considerations to the results of the operational, legal, accounting, tax-related and environmental due diligence, premiums added to the market value of shares in precedent tender offers, the possibility of approval by the Target Company regarding the Tender Offer, trends in the market price of the Common Stock and the forecasts of the Tender Offeror, the Tender Offeror determined, at the meeting of the Board of Directors held on February 13, 2008, that the purchase price of the Tender Offer shall be 880 yen per share. At the same meeting of the Board of Directors, the Tender Offeror determined that the purchase price of the Stock Acquisition Rights in the Tender Offer shall be 1 yen per Stock Acquisition Right based on the reasons set forth in "Basis of Calculation".

The price for the Third Party Allocation of New Shares which will be conducted at the same time as the Tender Offer (the "Third Party Allocation Price") has been determined to be 683 yen per share. The Third Party Allocation Price is equal to (i) the closing price of 631 yen per share quoted on the first section of the Tokyo Stock Exchange on February 12, 2008, plus a premium of approximately 8.24% or (ii) approximately 98% (rounded to the nearest hundredth of a percent) of the average closing price of 697 yen per share (rounded to the nearest whole number) quoted on the first section of the Tokyo Stock Exchange for the past 3 months ending on February 12, 2008, one day prior to the meeting of the Board of Directors of the Target Company at which the resolution pertaining to the Third Party Allocation of New Shares was decided.

The Third Party Allocation Price is below that of the per share purchase price in the Tender Offer. However, when determining the Third Party Allocation Price, factors such as the continuing instability of the stock market were considered, and the issue price was calculated based on a comparison between the final closing price of the shares of the Target Company on the Tokyo Stock Exchange on the day of trading immediately prior to the date on which the Board of Directors determined the price, and the average closing price during the period mentioned above, which is believed to more accurately reflect the corporate value of the Target Company. Furthermore, the Tender Offeror has received explanations to the effect that the discount rate of the Third Party Allocation Price was determined after comprehensive consideration was given to the possibility of market fluctuations before the share subscription date, the number of issued and outstanding shares of the Target Company, the number of shares being issued through the Third Party Allocation of New Shares, the current condition of the market and the need for the issuance of shares on this occasion, among others.

c. Relationship with Appraisers

Nomura Securities Co., Ltd. is not a related party of the Tender Offeror or the Target Company.

(5) Number of Shares and Other Securities to be Purchased in the Tender Offer

Class of Share Certificates and Other Securities Number Scheduled to be Purchased Represented by Shares Minimum Number Scheduled to be Purchased Represented by Shares Maximum Number Scheduled to be Purchased Represented by Shares
Share Certificate
73,190,000 shares
73,190,000 shares
-
Certificate of Stock Acquisition Rights
-
-
-
Bond Certificate with Stock Acquisition Rights
-
-
-
Depositary Receipt for Share Certificates and Other Securities
-
-
-
Total
73,190,000 shares
73,190,000 shares
-

(Note 1) If the total number of shares tendered is less than the number listed above in "Minimum number scheduled to be purchased represented by shares" (73,190,000 shares, the "Minimum Number of Shares to be Purchased"), none of the tendered shares will be purchased by the Tender Offeror. If the total number of shares tendered in the Tender Offer exceeds the Minimum Number of Shares to be Purchased (73,190,000 shares), all of the tendered shares will be purchased by the Tender Offeror.

(Note 2) Shares constituting less than a whole unit shall also be subject to purchase through the Tender Offer. However, to apply, the relevant share certificates (unless such share certificates are kept in custody of the Japan Securities Depository Center, Inc. through the agent for the Tender Offer (the "Tender Offer Agent", as specified below in "(11) Tender Offer Agent")) must be submitted to the Tender Offer Agent. The Target Company may purchase its own shares in accordance with legal procedures during the Tender Offer Period from any shareholder who exercises the right under the Japanese Company Law to require the Target Company to purchase shares constituting less than a whole unit.

(Note 3) The Tender Offeror does not intend to acquire the 1,251,000 treasury shares held by the Target Company (as of September 30, 2007) through the Tender Offer.

(Note 4) Stock Acquisition Rights may be exercised prior to the last day of the Tender Offer Period. Shares of the Target Company that are be issued or transferred as a result of such exercise of Stock Acquisition Rights shall also be subject to the Tender Offer.

(Note 5) The maximum number of shares to be purchased in the Tender Offer is 196,127,861 shares. This number represents the sum of (i) the total number of issued shares described in the 109th Semi-Annual Securities Report submitted by the Target Company to the Kanto Local Finance Bureau on December 14, 2007 (197,160,461 shares), less treasury shares held by the Target Company (1,251,000 shares), and (ii) the maximum number of shares of the Target Company which may be issued or transferred upon exercise of the Series 1 through Series 3 Stock Acquisition Rights (218,400 shares, including shares that were issued or transferred upon exercise of the Stock Acquisition Rights between December 1, 2007 and the date of this press release. The outstanding Stock Acquisition Rights, as reported on the 109th Semi-Annual Securities Report submitted by the Target Company to the Kanto Local Finance Bureau on December 14, 2007, were calculated in accordance with the terms of the Stock Acquisition Rights: Each of the 90 units of Series 1 Stock Acquisition Rights representing 1,000 shares, each of the 58,500 units of Series 2 Stock Acquisition Rights representing 1 share and each of the 69,900 units of Series 3 Stock Acquisition Rights representing 1 share of the Target Company); provided, however, that the Tender Offeror and Taisho agreed in the Agreement that Taisho would not tender the shares of the Target Company which it holds in the Tender Offer. Therefore, the maximum number of shares is 153,127,861 shares, after the Tender Offer Shares (43,000,000 shares) have been subtracted.

(6) Changes in Ownership Percentage of Share Certificates and Other Securities due to the Tender Offer

Number of Voting Rights Represented by Share Certificates and Other Securities Owned by the Tender Offeror prior to the Tender Offer
-
(Ownership Percentage of Share Certificates and Other Securities prior to the Tender Offer: 0.00%)
Number of Voting Rights Represented by Share Certificates and Other Securities Owned by Specially Related Parties prior to the Tender Offer
43,000
(Ownership Percentage of Share Certificates and Other Securities prior to the Tender Offer: 22.22%)
Number of Voting Rights Represented by Share Certificates and Other Securities to be Purchased
73,190
(Ownership Percentage of Share Certificates and Other Securities after the Tender Offer: 37.32%)
Total Number of Voting Rights of Shareholders of the Target Company
193,538
 

(Note 1) The "Number of Voting Rights Represented by Share Certificates and Other Securities to be Purchased" is the number of voting rights with respect to the number of shares and other securities to be purchased through the Tender Offer.

(Note 2) The "Total Number of Voting Rights of Shareholders of the Target Company" represents the number of voting rights of all shareholders as of September 30, 2007, as described in the 109th Semi-Annual Securities Report submitted by the Target Company to the Kanto Local Finance Bureau on December 14, 2007 (1,000 shares constitute 1 unit).

(Note 3) Because shares of the Target Company that are issued or transferred upon exercise of the Series 1 through Series 3 Stock Acquisition Rights are also subject to the Tender Offer, for the purpose of calculating "Ownership Percentage of Share Certificates and Other Securities after Tender Offer", the denominator used in the calculation 196,127 units. This number represents the sum of (i) the total number of voting rights of shareholders of the Target Company (193,538), as recorded in the aforementioned 109th Semi-Annual Securities Report, (ii) the number of voting rights (2,371) represented by the number of shares constituting less than a whole unit (2,371,461 shares), and (iii) the number of voting rights (218 units) represented by the maximum number of shares of the Target Company (218,400 shares) which may be issued or transferred upon exercise of the Series 1 through Series 3 Stock Acquisition Rights.

(Note 4) Because the Tender Offeror will purchase all of the tendered shares and other securities if the number of tendered shares exceeds the "Minimum Number Scheduled to be Purchased Represented by Shares" (73,190,000 shares), the "Ownership Percentage of Share Certificates and Other Securities after Tender Offer" may reach 100%. However, because the Tender Offeror and Taisho have agreed in the Agreement that Taisho will not tender the Taisho Shares (43,000,000 shares) in the Tender Offer, the maximum number of voting rights represented by the number of shares which the Tender Offeror may purchase through the Tender Offer is 153,127, rather than the maximum number of units represented by all of the shares of the Target Company (196,127 units representing 196,127,861 shares).

(Note 5) At the meeting of the Board of Directors held on February 13, 2008, the Target Company resolved to issue shares through a Third Party Allocation of New Shares (43,925,000 shares of Common Stock, at 683 yen per share, for an aggregate total of approximately 30 billion yen) with a subscription date of February 28, 2008. Of the total of 43,925,000 shares to be issued pursuant to the Third Party Allocation of New Shares, 28,990,000 shares will be allocated to the Tender Offeror and 14,935,000 shares will be allocated to Taisho. As a result, the Tender Offeror will hold shares representing 102,180 voting rights (a shareholding ratio of 42.57% after the Third Party Allocation of New Shares is effected), which represents the total of (i) the number of shares to be acquired by the Tender Offeror through the Tender Offer (73,190,000 shares) and (ii) the number of shares of the Target Company which the Tender Offeror is scheduled to acquire through the Third Party Allocation of New Shares (28,990,000 shares). Taisho, on the other hand, will hold shares equivalent to 57,935 voting rights (a shareholding ratio of 24.13 % after the Third Party Allocation of New Shares is effected), which represents the total of (i) the number of shares already held by Taisho (43,000,000 shares) and (ii) the number of shares of the Target Company which Taisho is scheduled to acquire through the Third Party Allocation of New Shares (14,935,000 shares). The Tender Offeror, together with Taisho, will hold 160,115,000 shares for an aggregate shareholding ratio of 66.70% after the Third Party Allocation of New Shares is effected. If the Third Party Allocation of New Shares is effected, the "Ownership Percentage of Share Certificate and Other Securities after the Tender Offer" with respect to the Tender Offeror will be 42.57% and the total ownership percentage including the "Number of Voting Rights Represented by Share Certificates and Other Securities Owned by Specially Related Parties" will be 66.70%. These figures are calculated based on the following: (i) the Total Number of Voting Rights of 240,052 is the sum of "Total Number of Voting Rights of Shareholders of the Target Company" (196,127) which is calculated as set forth in Note 3 and the number of voting rights allocated through the Third Party Allocation of New Shares (43,925), (ii) the Number of Voting Rights Represented by Share Certificates and Other Securities Owned by the Tender Offeror after the Tender Offer of 102,180 is the sum of "Number of Voting Rights Represented by Share Certificates and Other Securities to be Purchased" (73,190) and the number of voting rights that will be allocated to the Tender Offeror through the Third Party Allocation of New Shares (28,990), and (iii) the Number of Voting Rights Represented by Share Certificates and Other Securities Owned by Specially Related Parties after the Tender Offer of 57,935 is the sum of the Number of Voting Rights already held by Taisho (43,000) and the number of voting rights allocated to Taisho through the Third Party Allocation of New Shares (14,935).

(Note 6) "Ownership Percentage of Share Certificates and Other Securities prior to the Tender Offer" and "Ownership Percentage of Share Certificates and Other Securities after the Tender Offer" is rounded to the nearest hundredth of a percent.

(7) Aggregate Tender Offer Price

64,407 million yen

(8) Method of Settlement

a. Name and Address of Head Offices of Securities Companies and Banks, etc. in Charge of Settlement

Nomura Securities Co., Ltd.
1-9-1, Nihonbashi, Chuo-ku, Tokyo

b. Settlement Commencement Date

Wednesday, March 26, 2008

(Note) If the Target Company submits an opinion report requesting an extension of the Tender Offer Period pursuant to Article 27-10, Paragraph 3 of the Law, the settlement commencement date will be Tuesday, April 8, 2008.

c. Method of Settlement

A notice of purchase will be mailed to each shareholder who applies for the Tender Offer (a "Tendering Shareholder") (or the standing proxy in the case of shareholders and other parties who reside outside of Japan) promptly after the end of the Tender Offer Period. Payment of the purchase price will be made in cash. The Tender Offer Agent will, in accordance with the shareholder's instructions, remit the purchase price promptly after the commencement of settlement to the account designated by the Tendering Shareholder or provide payment for such purchase price at the head office or any branch office in Japan of the Tender Offer Agent.

d. Method to Return Share Certificates and Other Securities

If all of the share certificates tendered are not purchased under the terms mentioned in "a. Conditions set forth in each Item of Article 27-13, Paragraph 4 of the Law" or "b. Conditions of Withdrawal, etc. of Tender Offer, Details thereof and Method of Disclosure of Withdrawal" under "(9) Other Conditions and Methods of Purchase, etc", the tendered share certificates will be returned by the Tender Offer Agent to the Tendering Shareholder, in accordance with the Tendering Shareholders' instructions, promptly after the settlement date (or the date of withdrawal if the Tender Offer is withdrawn). The share certificates and other securities that were not purchased shall (i) be delivered to the Tendering Shareholder or mailed to the Tendering Shareholder's address (in the case of Foreign Shareholders, the address of their standing proxy) or (ii) in cases where at the time of application the relevant share certificates were kept in custody by the Tender Offer Agent (or by the Japan Securities Depository Center, Inc. through the Tender Offer Agent), be returned to the same condition of custody as at the time of application.

(9) Other Conditions and Methods of Purchase, etc.

a. Conditions set forth in each Item of Article 27-13, Paragraph 4 of the Law

If the total number of shares tendered is less than the Minimum Number Scheduled to be Purchased (73,190,000 shares), none of the tendered shares will be purchased by the Tender Offeror. However, if the total number of shares tendered meets or exceeds the Minimum Number Scheduled to be Purchased, the Tender Offeror will purchase all of the tendered shares.

b. Conditions of Withdrawal, etc. of Tender Offer, Details thereof and Method of Disclosure of Withdrawal

Upon the occurrence of any event listed in Article 14, Paragraph 1, Items 1.1 through 1.9 and Items 1.12 through 1.18, Items 3.1 through 3.8, Item 5, as well as Article 14, Paragraph 2, Item 2, Items 3 through 6 of the enforcement order under the Law (the "Enforcement Order"), the Tender Offeror may withdraw the Tender Offer. Should the Tender Offeror intend to withdraw the Tender Offer, it will give notice through electronic disclosure as well as in The Nihon Keizai Shimbun; provided, however, that if it is deemed difficult to give such notice within the Tender Offer Period, the Tender Offeror will make an official announcement pursuant to Article 20 of the Cabinet Ordinance regarding disclosure of tender offer for shares and other securities by non-issuers (the "TOB Order") and forthwith give public notice.

c. Conditions of Reduction of Purchase Price, etc., Details thereof and Method of Disclosure of Reduction, etc.

Pursuant to Article 27-6, Paragraph 1, Section 1 of the Law, if the Target Company takes any action enumerated in Article 13, Paragraph 1 of the Enforcement Order during the Tender Offer Period, the Tender Offeror may reduce the purchase price of the Tender Offer pursuant to standards set forth in Article 19, Paragraph 1, of the TOB Order. Should the Tender Offeror intend to reduce the per share purchase price to be paid in the Tender Offer, it will give notice through electronic disclosure and give notice of such disclosure in The Nihon Keizai Shimbun; provided, however, that if it is deemed difficult to give such notice within the Tender Offer Period, the Tender Offeror will make an official announcement pursuant to Article 20 of the TOB Order and forthwith give notice. If the purchase price is reduced, the Tender Offeror will purchase any shares or other securities tendered prior to the announcement of such change at the amended purchase price.

d. Matters Concerning Tendering Shareholders' Right of Cancellation of Application

A Tendering Shareholder may cancel an application for the Tender Offer at any time during the Tender Offer Period. In case of such cancellation, the Tendering Shareholder must deliver or mail a written request for the cancellation of the application for the Tender Offer ("Written Request for Cancellation"), enclosing the Receipt of Application for the Tender Offer, to the head office or any branch office in Japan of the entity listed below by 15:30 on the last day of the Tender Offer Period. If by mail, the cancellation of the acceptance of the Tender Offer will not be effective unless the Written Request for Cancellation is delivered by 15:30 on the last day of the Tender Offer Period.

No compensation for damages or penalty payment will be demanded of any Tendering Shareholder by the Tender Offeror in the event that the application by the Tendering Shareholder is canceled. The cost of returning the share certificates and other securities held in custody by the Tender Offeror will be borne by the Tender Offeror.

e. Method of Disclosure if the Conditions or other Terms of the Tender Offer are Changed

Should any terms or conditions of the Tender Offer be changed, the Tender Offeror will give public notice thereof through electronic disclosure and give notice of such disclosure in The Nihon Keizai Shimbun; provided, however, that if it is deemed difficult to make such notice within the Tender Offer Period, the Tender Offeror will make an official announcement in accordance with Article 20 of the TOB Order, and forthwith give public notice. The purchase of the shares and other securities tendered prior to such public notice will also be made in accordance with the terms and conditions as changed.

f. Method of Disclosure if Amendment Statement is Submitted

If an amendment statement is submitted to the Director-General of the Kanto Local Finance Bureau, the Tender Offeror will promptly make an official announcement of the contents of such amended statement to the extent relevant to the contents of the public notice of the Tender Offer, in accordance with the manner set forth in Article 20 of the TOB Order. The Tender Offeror will also promptly amend the tender offer explanatory statement and provide the amended tender offer explanatory statement to the Tendering Shareholders who have received the original explanatory statement. If the amendments are limited in extent, however, the Tender Offeror may, instead of providing an amended tender offer explanatory statement, prepare and deliver a document stating the reason for the amendments, the matters amended and the details thereof to the Tendering Shareholders.

g. Method of Disclosure of Results of Tender Offer

The Tender Offeror will announce the results of the Tender Offer in accordance with methods stipulated in Article 9-4 of the Enforcement Order and Article 30-2 of the TOB Order on the day following the last day of the Tender Offer Period.

(10) Date of Public Notification

Tuesday, February 19, 2008

(11) Tender Offer Agent

Nomura Securities Co., Ltd.
1-9-1, Nihonbashi, Chuo-ku, Tokyo

3. Policies Subsequent to the Tender Offer and Outlook

Based on the Agreement, the Tender Offeror, together with FUJIFILM, plans to continue to engage in detailed discussions with the Target Company and Taisho regarding the overall management of the Target Company pursuant to the terms of the Agreement. Specifically, pursuant to the terms of the Agreement, the Tender Offeror plans to discuss with Taisho and the Target Company (i) providing funds needed by the Target Company for clinical development costs and research for the creation of new drugs such as T-817MA (agents for the treatment of Alzheimer disease), T-705 (antiviral drug) and T-2307 (antifungal drug), and costs relating to manufacturing facilities for these new drugs, through the Third Party Allocation of New Shares, (ii) other fund raising for the Target Company by the Tender Offeror and Taisho, which will be conducted pursuant to a separate agreement, (iii) granting FUJIFILM Group and Taisho the right to appoint directors to the Target Company's board, and other potential changes to the composition of the Board of Directors of the Target Company, and (iv) implementing other measures in order to maximize synergies between FUJIFILM Group, Taisho and the Target Company, among others.

4. Other Matters

(1) Agreements between Tender Offeror and Target Company or its Directors and Officers

a. The Board of Directors of the Target Company resolved, at the meeting of the Board of Directors held on February 13, 2008, to approve the Tender Offer.

b. The Tender Offeror, the Target Company and Taisho entered into the Agreement summarized below on February 13, 2008.

(1) Tender Offer

The Tender Offeror agreed that it will launch the Tender Offer. The Tender Offeror and Taisho agreed that Taisho will not tender its shares and the Target Company agreed that it will cooperate in the Tender Offer.

(2) Full Control over the Target Company

Depending on the result of the Tender Offer, the Tender Offeror and Taisho will discuss in good faith whether to acquire all the issued and outstanding Fully Acquirable Class Shares (as defined below) after attaching a provision for acquisition of Common Stock to a class of shares of the Target Company (the "Fully Acquirable Class Shares", and the acquisition of such Fully Acquirable Class Shares shall be the "Full Acquisition") and report the outcome of the discussions to the Target Company.

Upon receiving the notice regarding the Full Acquisition, the Target Company will, in accordance with applicable rules and regulations, (i) submit an agenda necessary to attach a provision for acquisition of Common Stock to a class of shares of the Target Company at the Meeting of the Shareholders, (ii) after the approval by the shareholders, implement the Full Acquisition and issue new shares of the Target Company as consideration to the shareholders in exchange for the Fully Acquirable Class Shares.

The Tender Offeror will cooperate to its best ability, and Taisho will cooperate within reasonable parameters, in implementing the Full Acquisition.

(3) Transfer of Shares

The Tender Offeror will, in accordance with applicable rules and regulations, transfer to Taisho shares necessary to constitute 34% of the voting rights of the Target Company, at price substantially similar to the purchase price of the Tender Offer, by the beginning of 2009.

(4) Third Party Allocation of New Shares

The Target Company will allocate new shares through the Third Party Allocation of New Shares to the Tender Offeror and Taisho, in the amount of 28,990,000 shares and 14,935,000 shares, respectively, for an aggregate total of 43,925,000 shares.

(5) No Implementation, etc. of Anti-Takeover Measures

The Board of Directors of the Target Company shall not implement the anti-takeover measures that were introduced pursuant to the approval of the Board of Directors of the Target Company at the meeting held on May 15, 2006.

(6) Proposals for the Target Company's Shareholders' Meeting

Under certain circumstances, the Target Company will seek prior consent from both the Tender Offeror and Taisho with respect to agendas to be proposed (the "Proposals") at the Ordinary General Shareholders' Meeting with record date as of March 31, 2008 and the Extraordinary Shareholders' Meetings that may take place thereafter; provided, however, that the Tender Offeror and Taisho shall not unreasonably reject such agenda or withhold such consent.

After the Tender Offer, the Target Company may propose, under certain circumstances, that out of the nine directors on the Target Company's Board of Directors, three outside directors will be nominated by Taisho and the remaining six directors will be nominated by the Tender Offeror.

(7) Shareholders Agreement

If, as a result of the Tender Offer, the Tender Offeror, together with Taisho, acquires two-thirds or more of the voting rights of the Target Company, the Tender Offeror and Taisho will further discuss (i) granting Taisho the right to appoint one-third of the Board of Directors of the Target Company, and granting the Tender Offeror the right to appoint the remainder of the Board, (ii) matters concerning material decision-making procedures of the Target Company and (iii) matters relating to the treatment of the shares of the Target Company after the Full Acquisition, and enter into an agreement, which is expected to become effective upon the Transfer.

(8) Exclusive Negotiation Obligation

Each party may not, during the term of the Agreement, enter into, execute, propose or solicit any action that might substantially interfere with the capital and business alliance, such as a capital participation by a third party, a business alliance, a transfer of all or a significant part of its business or assets (including organizational restructuring such as the offering of new shares or treasury shares, assignment of shares, business transfer, merger, corporate split, share exchange, share transfer); provided, however, if refraining from such activities would objectively and reasonably constitute a violation of the duty of care by the Directors of each party, the foregoing sentence shall not apply.

(2) Other Relevant Information which Investors May Need in Evaluating the Tender Offer

The Target Company recorded 362 million yen of "provisions for allowance for investment losses" in the fiscal year ended March 31, 2007. However, in its press release "Notification with Respect to Increase in Extraordinary Gain", dated January 30, 2008, the Target Company announced that it is unlikely that the Target Company will incur these losses as the securities it was holding are now publicly-listed, and therefore recorded the 362 million yen as a "reversal of allowance for investment losses" for the third quarter of fiscal year ending March 2008.

Please be advised that pursuant to Article 167, Paragraph 3 of the Law and Article 30 of the Enforcement Order, any person who has accessed the information concerning the Tender Offer contained in this press release may be restricted from purchasing or otherwise trading the share certificates and other securities of the Target company, as a first-hand recipient of information under the regulations on insider trading, for 12 hours from the publication of this press release (i.e., from the afternoon of February 13, 2008, the time this press release was published on the Tokyo Stock Exchange's Timely Disclosure Information Access Service. Also, please note that the Company shall not be held responsible for any criminal, civil or administrative changes brought against any person for his/her purchase or other trade.

This press release has been prepared only for the purpose of informing the public of the Tender Offer and other issues. This has not been prepared for soliciting sales or purchases. When conducting any sales, shareholders should make appropriate judgments after reviewing the tender offer explanatory statement for the Tender Offer prepared by the Company.

This press release includes business forecasts by the management. However, the business results may differ from the forecasts based on various factors.

Neither this press release nor any part hereof constitutes document to subscribe for, solicit the sales of, or solicit applications for the purchase of, securities. Neither this press release (nor any part hereof) nor its distribution shall be interpreted to be the basis of any agreement in relation to the Tender Offer, nor may it be relied on at the time of concluding any agreement.

Certain countries, regions and other jurisdictions may impose certain restrictions on the release, issue or distribution of press releases of this nature under their laws and regulations. In such cases, you are required to comply with such laws and regulations in such countries, regions and other jurisdictions in light of such restrictions. In jurisdictions where the implementation of the Tender Offer is illegal, even if you receive this press release, such receipt shall not constitute any solicitation for the application for the purchase or sale of share certificates in relation to this Tender Offer, and this press release shall be deemed as the distribution of information for reference only.

Media Contact

FUJIFILM Holdings Corporation
Corporate Planning Division Public Relations Group
Tel: +81-3-6271-2000
FUJIFILM Holdings Website:
Japanese : http://www.fujifilmholdings.com/ja/
English : http://www.fujifilmholdings.com/en/