Japan's JSR shares jump after media report of tender offer launch (updated)

JSR

04/03/2024 01:27

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      JIC to launch tender offer this month -report
    

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      Negotiations with China regulators now on track -report
    

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      JSR's share trading at discount to tender offer price
    

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      China antitrust approval seen as tightest bottleneck
    

  
 (Adds JSR comment, details of China exposure)
    By Sam Nussey and Makiko Yamazaki
       TOKYO, March 4 (Reuters) - Shares in Japanese chip
materials maker JSR Corp  4185.T  jumped 4.6% to 4,238 yen in
early Tokyo trading on Monday following a media report that
state-backed fund Japan Investment Corp (JIC) plans to launch a
tender offer for the shares this month.
    JSR, a major maker of photoresists used in chipmaking,
announced last June it would be acquired by JIC, which is
overseen by Japan's industry ministry, in a $6.4 billion deal
aimed at driving consolidation within the sector.
    The tender offer was slated to begin at the end of last year
but JIC in December postponed it to late February at the
earliest, citing a delay in a Chinese antitrust review as the
reason. It said it would update if the offer had not begun by
March-end.
    Negotiations with Chinese authorities are now on track with
JIC planning to launch the tender offer this month, the Nikkan
Kogyo newspaper reported without citing sources.
    JIC did not immediately respond to requests for comment. JSR
said it has not made an announcement and will make disclosures
when appropriate. 
    JSR shares have been trading at a discount to the tender
offer price of 4,350 yen per share, reflecting investor doubts
about whether the deal will achieve regulatory approval. 
    JIC's CEO Keisuke Yokoo said in December there were no
issues with the Chinese regulator. "We expect it to be done by
March-end of the current financial year," he said.
    Regulatory approval in China, where JSR made around 18% of
its sales in the last financial year, is seen as the tightest
bottleneck for the buyout by JIC, which is also leading a group
to purchase chip packaging business Shinko Electric  6967.T  for
$4.7 billion. 
    The JSR go-private deal is controversial in the industry,
with executives and analysts questioning the company's prospects
of driving dealmaking in the materials sector, where Japanese
companies retain a leading role as suppliers in the global chip
supply chain.

 (Reporting by Sam Nussey; Editing by Kim Coghill and
Christopher Cushing)
 ((sam.nussey@tr.com;))