Panasonic Corp has raised its buyout offer for Sanyo Electric Co Ltd by ¥10 to ¥130 per share in the hope of closing a deal this week, the Nikkei financial daily reported, without citing sources.
A spokesman at Panasonic, the world’s biggest maker of plasma TVs, said on Thursday it would not disclose details of its ongoing talks with Sanyo’s shareholders. Sanyo shares plunged 13.0% to ¥147, while shares of Panasonic dropped 2.8% to ¥1,061. Both underperformed the Nikkei share Average, which gained 0.4%. Panasonic said on Nov. 7 it wanted to buy smaller rival Sanyo and later offered ¥120 per share, well below the market price.
To fully acquire Sanyo, Panasonic needs to buy out its top three shareholders -- Daiwa Securities SMBC, Sumitomo Mitsui Banking Co and Goldman Sachs Group Inc -- which bailed out the company in 2006. The three firms hold almost 430 million preferred shares, each of which can be exchanged for 10 common shares. If converted, they would hold a combined 70% stake.
Goldman Sachs, seeking a higher price, withdrew from the merger talks late last month. The US bank owns the equivalent of a 29% stake in Sanyo. Goldman is seeking an offer of more than ¥250, a premium of roughly 30% over the stock’s average price in the past three to six months, the Nikkei said. A Goldman Sachs spokesman in New York said the firm had no immediate comment. At ¥130 per share, the deal would be valued at about $8.4 billion.
Daiwa Securities and Sumitomo Mitsui Banking hold preferred Sanyo shares equivalent to a 40.6% stake. Both are expected to accept the sweetened offer, the Nikkei said. Daiwa Securities SMBC is a joint venture between Daiwa Securities Group Inc and Sumitomo Mitsui Financial Group Inc (SMFG). Sumitomo Mitsui Banking Corp is Sanyo’s main bank and part of SMFG.
Panasonic President Fumio Ohtsubo presented the revised offer on Wednesday to Daiwa Securities President Shigeharu Suzuki, the Nikkei said. Sumitomo Mitsui Banking was informed that day and Goldman Sachs will be told on Thursday, the report said.
Panasonic, formerly known as Matsushita Electric, plans to conduct a tender offer as early as next month to acquire a majority stake and turn Sanyo into a subsidiary by the end of March, the Nikkei said. A deal would boost Panasonic’s competitiveness in rechargeable batteries and solar power equipment as demand grows rapidly for greener energy sources.
Media reports have said Panasonic offered ¥12 share because of an expected dilution in Sanyo’s per-share value after the conversion of preferred shares. (Reuters)