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Goldman Sachs ends talks with Panasonic on Sanyo stake sale

Goldman Sachs said yesterday it had ended negotiations to sell its stake in Sanyo, creating trouble for Panasonic’s bid to turn Sanyo into a subsidiary and create one of the world’s largest electronics companies.

“We have walked away from the deal because of concerns over the price and deal structure,” Goldman spokeswoman Miyako Takebe said.

A Panasonic spokesman would say only that negotiations are ongoing.

Earlier this month, the presidents of Panasonic and Sanyo held a joint press conference and said they were starting talks on a buyout deal. Panasonic has said it hopes to turn Sanyo into a group company buy acquiring at least a 50 percent stake.

But any deal must be negotiated with Sanyo’s big three shareholders, Goldman, Daiwa Securities SMBC and Sumitomo Mitsui Banking Corp, which hold preferred shares that can be converted to about a 70 percent stake in Sanyo.

Goldman and Daiwa hold 29 percent stakes, while Sumitomo’s is about 12 percent. So a Goldman exit is not necessarily a death knell for the deal, but it means Panasonic could have to raise its offer.

Panasonic is widely reported to be offering ¥120 (US$1.26) per share for Sanyo, below the company’s current price on the open market. In morning trade yesterday, Sanyo shares were down 1.3 percent at ¥154 and have fallen by almost a fourth in value since the negotiations were announced.

If the major shareholders were to convert some or all of their shares, dilution would likely weigh down Sanyo’s shares further.
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