JIC-led group is frontrunner for Shinko Electric stake: sources
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A CONSORTIUM led by Japan Investment Corp (JIC) has emerged as the likeliest buyer for Fujitsu’s controlling stake in chip packaging unit Shinko Electric Industries, according to people familiar with the matter.
The group led by the state-owned investor is in advanced discussions for Fujitsu’s 50 per cent holding in Shinko Electric and plans to make an offer for the remaining shares and delist the company, the people said.
Shinko Electric could be valued at more than 800 billion yen (S$7.4 billion) in a deal, the people added, That represents a premium of at least 12 per cent based on the stock price before the Bloomberg News report.
Shares of Shinko Electric extended gains to 7.4 per cent in Tokyo and touched their highest level in almost two months following the Bloomberg News report.
JIC’s consortium includes Dai Nippon Printing and Mitsui Chemicals, said the people, who asked not to be identified as the information is private.
The group has become the frontrunner after beating out suitors including private equity firms, the people said. Should an agreement be reached, an announcement may come as soon as this week, they said.
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While discussions are at an advanced stage, they could still be delayed or fall apart, according to the people. Representatives for Dai Nippon, Fujitsu, JIC, Mitsui Chemicals and Shinko Electric declined to comment.
Fujitsu, once one of the world’s leading makers of personal computers and chips, has been looking to streamline its businesses and focus on communications and information technology.
The company is also preparing to sell its stake in its air-conditioner manufacturing unit Fujitsu General, but talks with bidders have stalled over valuation gap, Bloomberg News reported in May.
Founded in 1946 as a business that recycled household light bulbs, Shinko Electric develops and produces semiconductor packages for electric vehicles, home appliances and industrial equipment, according to its website. Its business network includes 13 locations in Japan and another 21 overseas.
The company had 5,713 employees as at Sep 30.
Besides the JIC-led group, Apollo Global Management, Bain Capital and KKR were among suitors shortlisted in the bidding for the controlling stake in Shinko Electric, Bloomberg News reported in August.
Fujitsu has been vetting suitors carefully and wants a buyer who would help Shinko Electric in its next stage of growth, chief financial officer Takeshi Isobe said in an earnings call in October.
JIC, founded in 2018, aims to enhance Japan’s competitiveness through supporting the growth of next-generation industries and stimulating private sector investment, according to its website.
The Japanese government is JIC’s majority shareholder with an investment of about 367 billion yen, while 25 investors including Asahi Kasei and Canon have contributed 13.5 billion yen in total.
A purchase of Shinko Electric would mark the second multibillion-US dollar transaction for JIC in just a few months.
In June, it agreed to buy out and privatise chipmaker compounds maker JSR in a US$6.3 billion deal. BLOOMBERG
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