BIG SALE: Japanese chipmaker Renesas Electronics Corp said it was considering selling a unit that designs display control chips, and media reports said Apple Inc is in talks to buy it for about 50bil yen (RM1.57bil). — Reuters
TOKYO: Renesas Electronics Corp. shares fell by the most in two years after the Japanese chipmaker said its top shareholders plan to reduce their stakes.
Innovation Network Corp. of Japan, a government-backed investor, Hitachi Ltd. and others will sell a total of 269.9 million shares, Renesas said in a statement Tuesday.
INCJ, its biggest shareholder, is cutting its holding to around 33 percent from the current 46 percent.
The stock sale is aimed at increasing Renesas’s independence and freeing it to pursue mergers, acquisitions or tie-ups with other companies, NHK reported before the announcement, without citing sources.
INCJ has been steadily reducing its Renesas shares, including the sale of a stake to Denso Corp. last month that gave the Toyota Group total ownership of about 7.5 percent.
Renesas said in a statement that the sale will broaden its shareholder base and increase liquidity.
“This doesn’t involve any fundraising, so there isn’t much meaning in this for Renesas,” said Masahiko Ishino, an analyst at Tokai Tokyo Research Center.
Renesas shareholders are offering the stock at a discount of as much as 5 percent from the close on the day of pricing, according to terms for the deal obtained by Bloomberg.
The stock fell 9.7 percent to 987 yen at the close, the steepest decline since April 2016. The total offering is valued at 288 billion yen ($2.7 billion) based on the unaffected closing price before the sale was reported, according to Bloomberg calculation.
“Renesas has completed most of its restructuring and is on its way to a new stage,” said Toshimitsu Irie, an INCJ spokesman. Improving liquidity is an important issue for the company and the reason the fund decided to reduce its stake, he said.
INCJ will sell at least 203 million shares in the offering, while Hitachi will offload 14.5 million shares, according to the statement.
The domestic tranche accounts for 20 percent of offering, with the rest reserved for international investors, including over-allotment and greenshoe, according to the terms.
The global management roadshow will run from Wednesday through April 16.
Renesas was formed in 2010 through the merger of money-losing chipmakers NEC and Renesas Technology Corp., a venture between Hitachi and Mitsubishi Electric. INCJ later became the chipmaker’s controlling owner when it stepped in to fund the struggling company.
INCJ, which is selling its shares on the market and not a designated buyer, will retain veto rights over key decisions, NHK reported. - Bloomberg
