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Nov-05-2009Asian Shares Mostly Lower; Sanyo Electric Tumbles(topic overview)
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TOKYO, Nov 4 (Reuters) - Japan's Panasonic Corp ( 6752.T ) said it would launch a tender offer for shares in Sanyo Electric Co ( 6764.T ) on Thursday, moving closer to becoming a powerhouse in hybrid car batteries and other green-energy businesses through the bid worth at least 402.3 billion yen ($4.5 billion). Panasonic said it would offer 131 yen per Sanyo share and aim for a majority stake in the world's largest rechargeable battery maker, reiterating its announcements late last year when the company first made public its intention of taking over Sanyo. [1] Sanyo Electric Co shares fell 25.0 percent to 162 yen as Panasonic Corp launched a tender offer for shares in the world's largest rechargeable battery maker, offering 131 yen per Sanyo share. All three of Sanyo's top shareholders -- Goldman Sachs ( GS - news - people ), Daiwa Securities SMBC and Sumitomo Mitsui Banking Corp -- have agreed to sell some of their shares.[2] Panasonic is looking to assume a majority stake in Sanyo, which is currently the world's largest rechargeable battery maker. Its offer price of 131 yen per share is down sharply from Sanyo's closing price on Wednesday. This notwithstanding, Panasonic is almost certain to acquire at least 50 percent of their rival, as three of Sanyo's top shareholders ' Goldman Sachs, Daiwa Securities and Sumitomo ' have already agreed to sell part of their stakes.[3] The offer price is down sharply from Sanyo's closing price on Wednesday of 216 yen. All three of Sanyo's top shareholders -- Goldman Sachs ( GS.N ), Daiwa Securities SMBC and Sumitomo Mitsui Banking Corp, which bought Sanyo shares at a lower price -- have agreed to sell part of their stake into the tender, ensuring that Panasonic will acquire more than half of Sanyo.[1]
Sanyo's three major shareholders - Goldman Sachs, Daiwa Securities SMBC and Sumitomo Mitsui Banking Corp. - have agreed to sell at least a combined 3.07 billion shares to Panasonic at that per-share price, which guarantees the Osaka-based company to take majority stake in Sanyo.[4]
If the deal goes through, the new company will be Japan's second-largest electronics maker, after Sony. The offer is on the table until Dec. 7, but with Goldman Sachs, Daiwa Securities and the Sumitomo-Mitsui group all signaling they will agree to sell their shares, Panasonic is likely to see the deal go through.[5]
Panasonic's board of directors decided on the tender offer Wednesday morning and Sanyo's board adopted a resolution to endorse the offer. The offer, which will run through Dec. 7, is expected to end successfully because the U.S. Goldman Sachs group and two other major Sanyo shareholders have agreed to sell more than 50 percent of their outstanding Sanyo shares to Panasonic at the planned price of 131 per share.[6] The three shareholders together control about 70 per cent of Sanyo's total outstanding shares. Panasonic has said earlier it hoped to purchase up to all of Sanyo's shares, but the company is largely expected to have to settle with the minimum controlling stake, as other shareholders are unlikely to want to sell theirs, with the tender offer price is now nearly half of the market level.[4]
Panasonic said it aimed to acquire a minimum stake of 50.04 percent in Sanyo through a tender offer worth 131 yen per share, giving the deal a value of at least 402.3 billion yen.[7] TOKYO, Nov. 5 (Xinhua) -- Electronics maker Panasonic on Thursday launched a tender offer to acquire more than 50 percent in rival Sanyo, aiming to make the company a subsidiary in a deal worth 400 billion yen (4.44 billion dollars).[5] TOKYO — Panasonic Corp. said Thursday it has begun a tender offer to take over smaller rival Sanyo Electric Co. for an estimated 402 billion yen (US$4.4 billion), moving closer to create one of the world's biggest electronics makers.[4]
Osaka, Japan - Panasonic will launch a tender offer for Sanyo Electric valued at approximately 402.3 billion yen or about $4.5 billion, according to current currency rates. The acquisition, which was announced last December, is expected to be completed by this December, according to various reports.[8] China is forcing Panasonic to sell off assets in Japan to secure approval for its acquisition of Sanyo Electric, the first time Chinese competition authorities have compelled disposals outside of the country in a monopoly review. The landmark ruling by China's commerce ministry clears the way for Panasonic to press ahead today with its long-delayed Y805bn ($9.4bn) tender offer to acquire Sanyo Electric, another Japanese company, and create a global battery power house.[9]
The takeover offer was delayed by regulatory issues but will now be launched on Thursday, running until December 7. Sanyo has agreed to sell some of its auto battery operations to address the concerns of competition authorities in Japan, China, Europe and the United States. Recently the firm has tried to focus on environmental technologies -- areas coveted by Panasonic, which is cutting 15,000 jobs and closing dozens of plants as it struggles to recover from its first annual loss for six years.[7]
The tender offer had been delayed by several months as Panasonic had to wait for clearance from anti-monopoly authorities in the U.S., China and the European Union to go ahead with the takeover. Panasonic barely managed to creep back into the black with July-September quarterly net income of 6.1 billion yen ($67 million), its first profit in a year. That was down 90 per cent from the previous year, despite recovering demand for refrigerators and washing machines. It projected a loss for the year, though narrower than initially forecast at 140 billion yen ($1.5 billion) compared to 195 billion yen.[4] Panasonic spokesman Akira Kadota said the tender offer is planned for Nov. 5 through Dec. 7 at the price of 131 yen ($1.4) per share.[4] Sanyo shares closed Wednesday's morning session at 225 yen on the Tokyo Stock Exchange. Panasonic is expected to complete the procedures to turn Sanyo into its subsidiary within December, some one year after it announced the plan to do so through a tender offer.[10] Sanyo shares closed Wednesday at 216 on the Tokyo Stock Exchange, down 12 from Monday, the previous market day. Panasonic is expected to complete the procedures to turn Sanyo into its subsidiary in December, roughly one year after the plan was announced.[6]
Sanyo shares have risen sharply since the deal with the key investors was first announced almost a year ago, ending Wednesday at 216 yen, down 5.3 percent from the previous close. Goldman said last month it had signed an agreement to sell slightly more than half of its shares in Sanyo, retaining a stake of 13.3 percent.[7]
Panasonic's purchase, which will cost at least $4.5 billion, would create a powerhouse in batteries for hybrid gas-electric cars. Together, the two might expand into other sectors, such as electric vehicles and green grid technologies. The two sides actually announced their plans in November 2008. But Panasonic waited for antitrust authorities in Japan and other countries to give their approval before proceeding. The reason for this is, a Panasonic-Sanyo alliance could be seen as too dominant in the hybrid and electric car battery sector. To avoid possible delays to the acquisition, Panasonic is expected to pare back its stake in Panasonic EV Energy, the battery joint venture with Toyota, from 40% to 20%. That would have the effect of lowering Panasonic's global share of the market for nickel metal-hydride batteries that power HEVs and EVs. China's antimonopoly body gave its conditional approval last week.[11] Particularly, the integration is expected to boost Panasonic's share of the world battery market. The United States is soon expected to become the last country to approve the integration, following China that gave its approval in late October. Combined group sales of Panasonic and Sanyo came to 9.54 trillion yen for the year to March 2009, close to Hitachi's 10 trillion yen and nearly 2 trillion above those of Sony Corp.[10]
Panasonic, the world's biggest plasma TV maker, is expected to purchase more than 50 per cent of Sanyo shares, hoping to take advantage of the smaller rival's green businesses in solar panels and rechargeable batteries.[4] Japanese technology company Panasonic has said it will launch a tender offer for rival Sanyo on Thursday, thereby taking a step closer to becoming a world leader in the manufacture of hybrid car batteries and other green energy operations. This is according to a report in the Financial Times.[3] OSAKA (Kyodo) Panasonic Corp. said it will launch a tender offer Thursday for shares of Sanyo Electric Co. to convert it into a subsidiary.[6] TOKYO (Dow Jones)--Panasonic Corp. (6752.TO) said Wednesday it will launch a tender offer Thursday for Sanyo Electric Co. (6764.TO) and.[12]
TOKYO — Japan's Panasonic Corp. said Wednesday that it would launch a delayed takeover bid worth at least 4.5 billion dollars for its struggling smaller rival Sanyo Electric Co. this week.[7] TOKYO Panasonic Corp. will make formal its takeover bid for Sanyo Electric Co., part of a move by Japan's largest consumer electronics company to transform itself into a green energy powerhouse.[13]
In Tokyo, Sanyo Electric tumbled on a report that Panasonic Corp. had bought a stake in the firm at a large discount. The Federal Open Market Committee left its target interest rate unchanged and maintained its language suggesting ultra-low rates would be maintained for an extended period.[14]
Panasonic said today that it's finally moving ahead with its acquisition of Sanyo Electric.[11]
Panasonic said Wednesday it won sufficient assurance from regulators around the world to proceed with the $4.45 billion deal that would give it a strong position in three promising enviro-businesses: solar panels, fuel cells and rechargeable batteries for hybrid and electric vehicles.[13] The expected takeover will make cash rich Panasonic a dominant player in the fast-growing market for hybrid car batteries. Existing customers for its batteries include Honda, Ford and Peugeot-Citro'n, while Panasonic itself already has a joint venture with Japanese giant Toyota to produce both hybrid and electric batteries.[3] The planned takeover would make Panasonic, which was sitting on cash and cash equivalent of 1.46 trillion yen as of Sept. 30, a dominant player in the fast-growing market for hybrid car batteries.[1]
Customers for Sanyo's hybrid car batteries include Honda Motor Co Ltd ( 7267.T ), Ford Motor Co ( F.N ) and PSA Peugeot Citroen ( PEUP.PA ), while Panasonic runs a joint venture with Toyota Motor Corp ( 7203.T ) to develop and make hybrid and electric car batteries.[1]
The transaction would make Sanyo a subsidiary of Panasonic and would make it a major player in batteries for green grid technologies and a wide range of CE-related products using lithium-ion technology, solar photovoltaic cells and batteries for electric vehicles, among other areas.[8]
Panasonic decided to make an offer for Sanyo last year, aiming to gain access to the electronic maker's green battery technology.[5] The actual tender offer comes more than a half year behind schedule as competition policy watchdogs in countries where Panasonic and Sanyo operate have taken a long time to examine whether the integration would run counter to antitrust rules.[10] After news of the tender offer broke, the value of single Sanyo shares dropped to 192 yen.[5] Sanyo share purchases are estimated to cost Panasonic at least 400 billion yen.[10] Sanyo in 2006 issued 300 billion yen in preferred shares, each of which can be exchanged for 10 common shares, to the three financial institutions at 700 yen a share to help it restructure after a sharp downturn in earnings.[1]
Panasonic is willing to pay 131 yen per share, but Sanyo was trading at 216 yen per share on Wednesday.[5] Prior to the announcement, shares of Sanyo closed down 5.3 percent at 216 yen.[1] Shares of Nissan Motor ( NSANY - news - people ), Japan's third-biggest automaker, jumped 3.2 percent to 682 yen after it revised its annual outlook to a profit from a loss as soaring sales in China helped drive quarterly earnings beyond the market's expectations.[2]
The deal would boost its group sales close to the level of Hitachi Ltd., Japan's largest electronics company. [6] The Japanese electronics giant first announced in December 2008 it had struck a deal with a clutch of heavyweight investors to buy a controlling stake in Sanyo and form an industry heavyweight amid the global economic downturn.[7] Kadota said that Sanyo is expected to become Panasonic's subsidiary by mid-December, a year after the two companies announced the buyout deal.[4]
Sanyo, founded by a brother-in-law of Panasonic founder Konosuke Matsushita, is a popular brand but in recent years has been seen as a relative loser in Japan's competitive electronics sector.[4]
Sanyo is also a major manufacturer of solar cells and Panasonic offers fuel cells, enabling the new Panasonic group to offer a wide range of environmentally friendly energy-producing and energy-storage products.[1] Sanyo is a major manufacturer of solar cells, while Panasonic currently offers fuel cells. This would enable the buyer to offer a wider range of environmentally friendly energy-producing and energy-storage products, says the Financial Times.[3]
Since the tender offer price is far lower than the market level, most of the individual investors are expected to refrain from accepting the offer. [10]
Most significantly, the integration is expected to boost Panasonic's share of the world battery market.[6]
Sanyo, which started off making bicycle lamps after World War II, has also cut thousands of jobs as it attempts to return to profit. It was forced to raise cash by issuing several billion dollars' worth of stock in 2006 to shore up its capital base, effectively handing over control to Goldman Sachs and other financial firms. [7]
SOURCES
1. UPDATE 1-Panasonic to launch tender offer for Sanyo on Nov 5 | Markets | Markets News | Reuters
2. Japan Hot Stocks-Sanyo, Mitsui Chemicals, Kanto Denka, Nissan - Forbes.com
3. Panasonic to launch Sanyo offer this week
4. The Canadian Press: Panasonic Corp. begins tender offer for Sanyo Electric Co. takeover
5. Sanyo receives tender offer from Panasonic_English_Xinhua
6. Panasonic to launch tender bid to become battery giant Thursday | The Japan Times Online
7. AFP: Panasonic to launch delayed Sanyo bid this week
8. Panasonic Makes Sanyo Tender Offer - 2009-11-04 09:57:18 EST | TWICE
9. FT.com / Technology - China puts curbs on Panasonic Sanyo deal
10. LEAD: Panasonic to launch tender offer Thurs. to turn Sanyo into subsidiary
11. Panasonic To Pay At Least $4.5 Billion For Sanyo Stake - BusinessWeek
12. Panasonic:To Launch Sanyo Tender Offer Thursday, Pay Y131/Share - WSJ.com
13. Panasonic Is Cleared to Make Sanyo Offer - WSJ.com
14. UPDATE: Asian Shares Mostly Lower; Sanyo Electric Tumbles - WSJ.com
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