Shares in Japan's JSR untraded on surprise possible buyout

JSR

26/06/2023 01:01

By Sam Nussey
       TOKYO, June 26 (Reuters) - Shares in Japan's JSR Corp
 4185.T  were untraded with a glut of buy orders early on
Monday, after the semiconductor materials maker said it was
considering a deal to be acquired by state-backed Japan
Investment Corp (JIC). 
    JSR's market capitalisation was 677 billion yen ($4.71
billion) at Friday's market close. JIC would spend about 1
trillion yen on the acquisition, the Nikkei newspaper reported,
injecting 500 billion yen into a new company to make the
purchase and borrowing 400 billion yen from Mizuho Bank. 
    Countries around the world are moving to tighten control
over the supply of semiconductors, which are essential to the
functioning of the defence, electronic and automotive
industries, amid elevated tensions between China and the United
States. 
    An acquisition by JIC, which is overseen by the powerful
trade ministry, would be the latest in a series of increasingly
muscular moves by Japan to juice up its chip industry, which has
lost global market share in recent decades. 
    "JIC is starting here. It would surprise me quite a bit if
that is where they stopped," Travis Lundy of Quiddity Advisors
wrote in a note on Smartkarma. 
    While Japan has a long and mixed record of intervening to
save floundering industrial players, a move to take private a
profitable company that has already undergone restructuring
risks criticism for potential overreach.
    JSR is a top supplier of photoresists, which are
light-sensitive chemicals used to print patterns on wafers, to
global chipmakers. It competes with companies including Tokyo
Ohka Kogya  4186.T  and Shin-Etsu Chemical  4063.T . 
    JSR, which was set up in 1957 as a government-backed
producer of synthetic rubber, reported a 20% jump in sales to
408.9 billion yen in the year ended March, while operating
profit declined 33% to 29.4 billion yen. 
    Shares in JSR, which unusually for a Japanese company has a
foreign-born CEO, have gained 25% year-to-date. Activist
investor ValueAct Capital is a major shareholder and has an
executive on the board. 
($1 = 143.6800 yen)

 (Reporting by Sam Nussey; Editing by Jamie Freed)
 ((sam.nussey@tr.com;))