Hoya Corp. said Friday it would make a $1.4 billion counterbid for NuFlare Technology Inc. in what could become a hostile offer for the Toshiba Corp. unit the electronics conglomerate plans to buy out.
Hoya’s interest in the manufacturer of chipmaking equipment further complicates a deal already being driven by activist investor Yoshiaki Murakami, which has amassed a 6.2 percent stake.
With Hoya offering a sweeter deal, it could also become another test case for Japan’s corporate governance when it comes to seeking higher returns for shareholders. Hoya is offering ¥12,900 — ¥1,000 more than Toshiba — valuing NuFlare at ¥147.7 billion ($1.4 billion).
NuFlare was not immediately available for comment.
Toshiba, which owns 52.4 percent of NuFlare, said last month it would launch a tender offer to buy the rest of the firm as part of efforts to overhaul its vast asset portfolio.
Hostile bids are still uncommon and are seen as taboo in Japan, where many companies are shielded by cross-share holdings under which companies hold stakes in one another to protect management.
But as shareholders have become more vocal about getting higher returns and the domestic market has continued to shrink, a handful of companies have launched unwelcome bids to seek expansion.
Most recently stationary supplies maker Kokuyo Co. launched a hostile bid to take a majority stake in smaller rival Pentel. Pentel turned to a rival maker, Plus, as a white knight to thwart Kokuyo’s bid.
Travel agent H.I.S. Co. launched a hostile bid in July to buy hotel chain Unizo Holdings. H.I.S. failed in its bid and since then Unizo has attracted global funds, such as Blackstone Group, which are still negotiating with the hotel chain for the takeover.
Hoya said it wants to buy at least two-thirds of NuFlare, meaning it would need Toshiba to sell at least part of its stake for the deal to go through. Hoya said the price was competitive enough to entice Toshiba to tender its shares.
But Toshiba said in a statement that there was no change to its plan to make NuFlare a fully owned unit, which it said was “the best option for maximizing NuFlare’s corporate value.” Its offer price of ¥11,900 had been agreed upon with a special committee set up by NuFlare and was “appropriate,” it said.
“While U.S. and European firms consider various options for restructuring, Japanese companies tend to fix upon only one. With Toshiba having decided to buy NuFlare, it doesn’t seem to have an alternative,” a Tokyo-based investment banker said.
Hoya would abandon its plans if it fails to take a minimum 66.67 percent, it said.
Shares in NuFlare jumped 11.6 percent to ¥13,310 in Tokyo’s morning trade.
Toshiba’s plans to acquire NuFlare come as Japanese companies remain under pressure to resolve conflicts of interest between publicly traded parent companies and their listed subsidiaries.
Toshiba has said it plans to spend ¥200 billion to convert NuFlare, plant engineering firm Toshiba Plant Systems and Services, and marine electrical systems maker Nishishiba Electric Co. into wholly owned units.