KKR in April agreed to buy Hitachi Kokusai Electric in a deal
valuing the company at about $2.3 billion and was due to buy up
to 48.33 percent of the company at 2,503 yen per share through a
tender offer as a first step in the process. The tender offer
was due to start as early as Thursday.
But a third-party committee reported to board of directors at
Hitachi Kokusai Electric that it no longer supported the terms
of the planned transaction which could be disadvantageous to
minority shareholders of Hitachi Kokusai.
On April 26, when KKR announced the deal, Hitachi Kokusai shares
closed at 2,675 yen, 6.9 percent higher than the KKR's offer
price. The stock has since risen above that level and closed at
2,894 yen on Wednesday.
KKR said the third-party committee "finds it difficult at the
current time to maintain its opinion that the legitimacy and
propriety of the tender offer price and share repurchase price
As part of the deal, Hitachi Kokusai was also planning to buy a
51.67 percent stake held by its parent Hitachi at 1,710 yen a
share and then cancel the shares.
KKR is also planning to sell a 40 percent stake in Hitachi
Kokusai's video solutions business to Hitachi and a Japanese
investment fund, Japan Industrial Partners Inc.
KKR said that it would continue discussions with Hitachi
Kokusai, Hitachi and Japan Industrial Partners on its plans
regarding the tender offer, whether to go ahead with it and its
(Additional reporting by Chris Gallagher; Editing by Muralikumar
Anantharaman and Jane Merriman)
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