Panasonic Corp. is meeting resistance
to its bid to kick off consolidation in the overcrowded Japanese electronics market by buying Sanyo Electric Co.
Standing in Panasonic's way are the traders at Goldman Sachs Group Inc., owners of a 29% stake in Sanyo. Goldman has rejected a second offer from Panasonic of ¥130 ($1.40) a share, or about $8.6 billion, and seeks a 30% premium on Sanyo's current price. Panasonic retorts that Goldman is getting almost double what it originally paid (about ¥70 per share).
If Panasonic succeeds in buying Sanyo, it will be nearly as big as market leader Hitachi Ltd., which pulls about $95 billion in revenue per year.
Goldman
may even raise its stake in the world's largest maker of rechargeable batteries, Bloomberg reported. It quoted an analyst saying, "The move seems to be a defensive action by Goldman to force Panasonic to raise the price, but [the analyst] isn't sure if it would work as Panasonic is in a better position to take its time on any deal. If need be, Panasonic can scrap the purchase as long as it forms business alliances with Sanyo."
A Dow Jones report suggests that depending on how it plays out, the outcome of the Sanyo bid could either spur or brake future M&A in the industry, which is caught between a severe slowdown in global consumer markets and exports curbed by the strength of the yen.
Daiwa Securities SMBC Principal Investment Co. Ltd. and Sumitomo Mitsui Banking hold about 40% of Sanyo, of which Goldman has the right of first refusal. Panasonic sees the deal as a cost-cutting move in a troubled economic environment. -
Baz Hiralal
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