Shares of NEC Electronics Corp, Japan's third-largest chipmaker, rose by the daily limit after a newspaper report said Perry Capital LLC offered ?154.4 billion (US$1.3 billion) for a 25 percent stake.
The stock climbed ¥500 yen, or 16 percent, to close at ¥3,670 on the Tokyo Stock Exchange, while the benchmark Nikkei 225 Stock Average fell 1.1 percent.
Perry will offer ¥5,000 a share to raise its holding from more than 4.5 percent, the Financial Times reported, citing a letter the New York-based hedge fund wrote on Tuesday to NEC Electronics and parent NEC Corp.
The offer would require NEC, which controls 70 percent of the chipmaker, to give up control of the unit's board, the newspaper said. NEC today said it received a letter from the fund, declining to comment on its content.
Sophie Yamamoto, a spokeswoman at Kawasaki-based NEC Electronics, declined to confirm or deny the report. Perry spokesman Michael Neus didn't immediately return a telephone call seeking comment after hours.
Overseas investors, whose ownership of Japan's publicly traded stock more than doubled in the past decade, are getting more active in demanding higher dividends and greater management transparency. Last month, shareholders of Bull-Dog Sauce Co approved measures to fend off a takeover bid from Warren Lichtenstein's Steel Partners Ltd.
Perry Capital's offer values NEC Electronics at 2.3 times the company's book value, compared with the stock's current valuation of 1.7 times. By comparison, shares of Toshiba Corp, Japan's biggest chipmaker, trade at 3.2 times the book value.
The fund, founded by former Goldman Sachs Group Inc partner Richard Perry, owned 4.76 percent of NEC Electronics as of March, according to data.
"We are not considering changing our shareholding in NEC Electronics," NEC president Kaoru Yano said a news conference yesterday. "There cannot be growth at NEC if its chip unit doesn't grow."
Separately, STMicroelectronics NV, Europe's largest semiconductor maker, plans to close facilities in Texas, Arizona and Morocco in an effort to save US$150 million a year.
The closures will affect 4,000 workers worldwide, the Geneva-based company said today in a statement. Most will remain in their jobs through the transition, STMicroelectronics said. It expects to offer transfers to some of those employees.
STMicroelectronics, which is led by chief executive officer Carlo Bozotti, has been shedding businesses in unprofitable areas. The company decided to close the three plants rather than spend money on upgrading them.
The plants are located in Phoenix; Carrollton, Texas; and Casablanca, Morocco. Production at the two US plants will be moved to cheaper locations in Europe and Asia. The Casablanca factory will have its testing and packaging functions transferred to another Moroccan facility or to subcontractors, the statement said.
The company expects to record pretax expenses of US$270 million to US$300 million for the closures, the statement said. About US$250 million of that will be in cash.
Shares of STMicroelectronics fell 15 cents, or 1 percent, to 14.35 euros (US$19.73) in Milan. The stock has gained 2 percent this year.
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