Pentax Corp. has reached a preliminary agreement to be bought by optical glass maker Hoya Corp. via a tender offer as soon as early June 2007, bringing to an end the company“s month-long quest to fin…
Pentax Corp. has reached a preliminary agreement to be bought by optical glass maker Hoya Corp. via a tender offer as soon as early June 2007, bringing to an end the company“s month-long quest to find a way to survive on its own. In a meeting with Hoya Chief Executive Officer Hiroshi Suzuki, Pentax President Takashi Watanuki agreed to support the tender offer on two conditions: that Pentax is not merged with Hoya for the time being (remaining a subsidiary) and that six board members are allowed to keep their posts. Suzuki indicated that he would take the matter under consideration, opening the way for the basic accord. The two executives were joined by their financial advisers. Selling off Pentax“s digital camera segment had previously been raised as a possibility. However this was not discussed at the meeting, and Hoya officials say the business will not be sold. Personnel moves and other details will be jointly negotiated within the month. Pentax has scheduled a board meeting for 24 May 2007 to endorse Hoya“s tender offer. In a bid for at least a majority stake, the optical equipment producer is expected to offer JPY 770 per Pentax share, the same price outlined in an April 2007 proposal. Should a large number of shares be tendered, Pentax could be delisted. Hoya and Pentax had reached a basic agreement to merge in December 2007. But in April, Watanuki and others against the proposal ousted then-President Fumio Urano and then-Executive Vice President Katsuo Mori, both of whom supported the merger. With Pentax scrapping the proposal, Hoya floated a tender offer as an alternative. In the meantime, Pentax top shareholder Sparx Group Co. issued a shareholder resolution calling for Urano and Mori to stay on as directors, effectively opposing the reappointment of the six other board members. The camera manufacturer released a medium-term business plan, laying out a strategy for surviving as an independent company. But market players were skeptical about whether the plan was feasible. With its general shareholders meeting approaching in late June 2007, Pentax decided to conditionally support Hoya“s tender offer.