Japanese camera and medical equipment maker Pentax said on 11 May 2007 there was a strong chance a white knight could save it from a takeover bid by high-tech glassmaker Hoya Corporation.
In April 20…
Japanese camera and medical equipment maker Pentax said on 11 May 2007 there was a strong chance a white knight could save it from a takeover bid by high-tech glassmaker Hoya Corporation. In April 2007, Hoya, known for its aggressive management and western-style corporate governance, proposed an improved bid that offered about 20% more than Pentax“s implied price based on an equity swap ratio agreed in December 2006, and Hoya“s market price. Pentax, a traditional maker of single-lens reflex cameras, is trying to convince leading shareholder Sparx Asset Management, a Tokyo-based investment fund, which has pressed Pentax to accept Hoya“s improved JPY 770 per share tender offer, or produce an alternative plan that could yield better returns. However Pentax, which reshuffled its management after an internal split over the earlier share-swap merger plan, cannot talk to potential white knights or private equity that could sponsor a management buyout until 31 May 2007 as it is committed to exclusive negotiations with Hoya until then. According to people familiar with the situation, Mizuho Securities , which has long links to Pentax and recently replaced Morgan Stanley as its financial adviser, is already in talks with various funds. “I imagine there“s a strong chance a white knight may appear”, Shinichiro Mitsuhashi, a Pentax director and former Mizuho banker, told reporters, though he said Pentax was not in contact with third parties. Pentax unveiled a new mid-term strategy aimed at doubling its annual operating profit to JPY 11.2 billion (USD 93.42 million) by 2010 as it focuses on three core businesses: cameras, lenses and medical equipment. “I don“t know if Sparx will approve our mid-term strategy”, said Takashi Watanuki, who took over as Pentax president when the board voted against the Hoya share-swap deal. Mr. Watanuki also said he was open to other options including white knights, buyouts and strategic alliances once the period of exclusive negotiations with Hoya is over. A spokesman for Sparx said the investment fund, which as of end-March 2007 held 24% of Pentax, would look closely Pentax“s plan. Sparx has also said it wants to use Pentax“s AGM on 22 June 2007 to reinstate former president Fumio Urano, who led earlier talks with Hoya.