Although Goldman Sachs Group Inc. is a bit bruised and disheveled from the global financial crisis, the New York-based bank is not desperate and won't pull a trigger on a deal just for the sake of cushioning its wallet in these lean times. Just ask electronics maker Panasonic Corp.
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The New York bank walked away Wednesday from talks with Panasonic to sell Sanyo Electronics Co. Bloomberg reports that Goldman ended discussions because the firm felt Panasonic's offer was too low and the electronics giant had no intention of making an offer for all of Sanyo's stock. Japanese daily newspaper Yomiuri reported that Goldman is asking for ¥250 ($2.62) per share while Panasonic was willing to pay ¥120 per share, a price below Sanyo's market value of ¥150 per share.
So, is Goldman making a mistake by walking away from Panasonic? At this point, probably not. Goldman feels Sanyo is likely undervalued in this financial climate. And with Panasonic flush with $10 billion in cash, Goldman knows the company has more than enough money to up its offer if it's really interested in Sanyo. But the question remains: Is Panasonic willing to up its ante to bring back Goldman to the negotiating table?
It'll be a game of cat-and-mouse that some analysts feel will result in Panasonic upping its offer because it is looking for another growing revenue stream, which Sanyo offers in its solar power equipment and status as the world's biggest maker of rechargeable batteries.
"This is a rare opportunity for Panasonic to gain a new growth driver," Mizuho Investors Securities analyst Nobuo Kurahashi told Reuters. "And cash is the strongest asset in the current business environment. For Panasonic, the time must look ripe to take advantage of its cash pile." - Gerald Magpily
See Bloomberg article
See Guardian article
