The acquisition contest for Shibaura Electronics, a maker of negative temperature coefficient (NTC) thermistors, has intensified as Minebea Mitsumi and Taiwan's Yageo Corporation have matched bids of JPY6,200 (US$41.95) per share. Both firms are vying to secure control amid strategic industry significance.
According to Reuters and Nikkei, at a press conference in Tokyo on August 18, Minebea Mitsumi chairman and CEO Yoshihisa Kainuma described the acquisition as a "once-in-a-lifetime opportunity," underlining the importance of Shibaura's thermistors, which are used in electric vehicle (EV) batteries. He noted that as battery capacities increase, demand for these sensors is expected to grow, enhancing their value.
Minebea Mitsumi has analyzed potential synergies with Shibaura over the past three months, affirming the target's intrinsic corporate value. While the company's recent offer matches Yageo's bid, Kainuma said Minebea Mitsumi's discounted cash flow analysis suggests a fair price could rise to JPY6,300 per share. However, he deemed JPY6,200 a reasonable ceiling under current conditions.
Yageo's tender offer bid (TOB) process has encountered delays due to Japan's Foreign Exchange and Foreign Trade Act review. The company was informed by regulators that economic security reviews remain incomplete, extending the examination period to at least September 1 and potentially up to November 1, as allowed by law.
Shibaura Electronics holds strategic importance in Japan, with its thermistors widely used in automotive applications and potentially aerospace products like drones. In July, Shibaura was designated as a core industry under Japanese law concerning foreign investments, highlighting its national significance.
Kainuma called for an end to the protracted acquisition fight, aiming to provide Shibaura shareholders with an early and dependable chance to realize returns. He also criticized Yageo's repeated TOB deadline extensions as unusual and implied that regulatory concerns might be causing delays.
When asked about a possible counteroffer by Yageo, Kainuma said Minebea Mitsumi would respond accordingly but believes it retains a strong position even if Yageo raises the price by JPY200 to JPY300 more.
On August 18, Yageo extended the TOB deadline again to August 28 and indicated it might revise its offer terms following Minebea Mitsumi's price increase, suggesting a further bid hike could be forthcoming.
Minebea Mitsumi disclosed that Japanese investment fund Advantage Partners is co-investing in this bid, sharing the funding burden. However, representatives from Advantage Partners did not appear at the August 18 press conference, unlike earlier events when they had joined as part of Minebea Mitsumi's white knight campaign.
Article edited by Joseph Chen
