US investor presses Japan Aviation and NEC to cancel buyback, reconsider buyout offers (updated)

NEC

22/02/2024 01:23

(Adds details of statement, context)
    By Makiko Yamazaki and Kantaro  Komiya
       TOKYO, Feb 22 (Reuters) - Chicago-based investor Curi
RMB Capital on Thursday said NEC Corp  6701.T  and its listed
unit Japan Aviation Electronics (JAE)  6807.T  should cancel
their buyback deal and reconsider alternative buyout offers they
have received.
    The call came after Reuters reported NEC had received
multiple buyout offers from global private equity funds for JAE
before agreeing to tender much of its 51% stake to the unit at a
discount via a tender offer.
        Curi RMB, with more than $11 billion under management,
owns shares in both NEC and JAE, which makes connectors used in
smartphones including iPhones.
    NEC had no immediate comment on Curi RMB's statement, and
JAE did not immediately respond to a request for comment.
        The buyback tender offer does not represent the best
interest of shareholders of both companies, Curi RMB said in a
statement, adding that it sees "potential conflict of interests"
between JAE and NEC management and minority shareholders.    
    NEC and JAE should disclose more information regarding the
multiple buyout offers they had received and explain why they
did not accept these buyout offers, Curi RMB said.
        If NEC and JAE do not do so, Curi RMB Capital said it
plans to seek the companies' board minutes under court
permission to evaluate their decision-making process and "pursue
appropriate recourse against the board on behalf of
shareholders".
        At least three global funds indicated to both JAE and
its parent NEC in the past they were willing to pay substantial
premiums to buy out the maker of electronics components, sources
told Reuters.
        JAE disclosed after the Reuters report that it had
received multiple buyout offers ahead of the ongoing tender
offer, but said the buyback deal would best contribute to
improving capital efficiency and shareholder returns.

 (Reporting by Kantaro Komiya and Makiko Yamazaki; Editing by
Leslie Adler and Sonali Paul)
 ((Kantaro.Komiya@thomsonreuters.com; Twitter: @kantarokomiya))