Panasonic Corporation (NYSE:PC)(TOKYO:6752)(the "Tender Offeror"
or the "Company") announced that it resolved at its Board of
Directors meeting held on July 29, 2010 to acquire the shares of
common stock of SANYO Electric Co., Ltd. (TOKYO:6764)(the "Target")
through a tender offer (the "Tender Offer") as follows:
1. Purpose of the Tender
Offer
(1) Overview of the Tender Offer
The Company currently owns 50.05% (3,082,309,227 shares) of the
aggregate number of issued shares of the Target (as of March 31,
2010: 6,158,053,099 shares). The Target is a consolidated
subsidiary of the Company; however, a decision was made recently to
acquire all of the issued shares of the Target's common stock
(excluding the treasury shares owned by the Target) through the
Tender Offer in order to make the Target the Company's wholly-owned
subsidiary. With respect to the Tender Offer, no maximum or minimum
number of shares scheduled to be purchased has been established.
The Tender Offer shall be commenced subject to, among others, the
nonoccurrence of any events which would have a material adverse
effect on achieving the purpose of the Tender Offer such as a
material change in the Target's or its subsidiaries' management or
assets.
According to the Target, at the Board of Directors meeting of
the Target held today, the Target has adopted a resolution to
announce its opinion to endorse the Tender Offer and to recommend
that the Target's shareholders tender their shares in the Tender
Offer.
(2) Description of the Decision Making Process through which the
Decision to Implement the Tender Offer was Made, and Management
Policies after the Tender Offer
Since its establishment in 1918, the Company has been conducting
business broadly in the electronics industry, guided by its basic
management philosophy, which states that "the mission of an
enterprise is to contribute to the progress and development of
society and the well-being of people worldwide through its business
activities." On the other hand, the Target has been developing its
activities, such as manufacturing, sales, maintenance and services,
in the Energy Business Segment, Electronic Device Business Segment,
Digital System Business Segment, Commercial Business Segment,
Consumer Electronics Segment and Other Business Segment, and, under
the management philosophy, "We are committed to becoming an
indispensable element in the lives of people all over the world,"
and has been striving to increase customer value.Under these
circumstances, the Company and the Target, with the objective of
overcoming a harsh global competitive environment, aiming to
maximize the corporate values of both the Company and the Target,
agreed on November 7, 2008, to enter into discussions regarding a
capital and business alliance based on the premise of making the
Target a subsidiary of the Company, and made an announcement on
December 19, 2008, titled "Panasonic and SANYO Agree to Capital and
Business Alliance." Thereafter, as described in the press release
titled "Panasonic Announces the Result of Tender Offer for SANYO
Shares" dated December 10, 2009, the Company implemented a tender
offer (the "Previous Tender Offer") for the Target's shares and
came to own 50.19% of the total number of voting rights of all
shareholders, etc. of the Target (as of September 30, 2009), and
the Target became a consolidated subsidiary of the Company.
As a result, the Panasonic Group has become a company group with
further reach and expertise in the electronics industry with 6
segments: Digital AVC Networks, Home Appliances, PEW and PanaHome,
Components and Devices, and Other, as well as SANYO.On January 8,
2010, the Company announced the Annual Management Policy Fiscal
2011 for the new Panasonic Group, and set out the vision of
becoming the "No. 1 Green Innovation Company in the Electronics
Industry" towards 2018, the 100th anniversary of its foundation.
Furthermore, on May 7, 2010, the Company announced its three-year
midterm management plan called "Green Transformation 2012"
("GT12"), which is the first step toward realizing the above
vision.Under GT12, the entire Panasonic Group will make group-wide
efforts to shift its paradigm for growth and to lay a foundation to
become a Green Innovation Company, while integrating its
contribution to the environment and business growth. By the time
this plan is completed, the Panasonic Group should be a company
filled with significant growth potential. In particular, the
Company will drastically shift its management resources to energy
systems, heating/refrigeration/air conditioning, network AV,
healthcare, security, and LED, as the group's 6 key business areas.
With regard to these business areas, the Company expects energy
systems, heating/refrigeration/air conditioning, and network AV to
be the core businesses of the group and to drive sales and revenues
of all group companies, and the Company intends to significantly
develop the 3 business areas of healthcare, security, and LED as
the next-generation key businesses. Furthermore, with those
businesses as the core of the Company's businesses, the Panasonic
Group will pursue a form of growth unique to it, through the
provision of "comprehensive solutions for the entire home, the
entire building, and the entire town."
Also, the Target, sharing the vision as the Panasonic Group and
the concept of GT12, formulated its new midterm management plan
(the "Target's Midterm Plan") that was announced in detail on May
11, 2010. In the Target's Midterm Plan, the Target clearly states
that it will aim to "establish the foundation for a highly
profitable company by demonstrating synergy," and that it will, in
addition to further strengthening the management culture aiming to
improve profitability, accelerate concentrated investment of its
management resources to the energy business and enhance the
competitiveness of profitable businesses in order to establish
continuous competitive superiority. In particular, in the solar
cell business that is included in the energy systems, one of the 6
key business areas of the Panasonic Group, the Target will make
aggressive investments for the purpose of increase in production of
cells and modules, and will accelerate the development of next
generation solar cells so as to become, in Fiscal 2013, the No. 1
player in the domestic market and to become, in Fiscal 2016, one of
the top 3 players in the global market. Also, the Target has a
policy of firmly maintaining its world leading status in the
consumer rechargeable battery business by increasing sales in
existing uses and developing new uses. Furthermore, in the HEV and
EV business (rechargeable batteries for eco cars), the Target aims
to gain a 40% global market share in Fiscal 2021.
In addition, the Company and the Target set up the
"Collaboration Committee" after the Previous Tender Offer, and have
considered specific measures to generate synergies. As a result,
the Company and the Target established a goal to generate synergies
for over 80 billion yen in the group's operating profit, in Fiscal
2013, through various measures such as strengthening the group-wide
sales network in the solar cell business, and optimizing their
strengths to the fullest extent in the lithium-ion battery
business. The contents of these measures are incorporated in
GT12.
Although the Company and the Target have already shared a
management strategy as group companies and have implemented various
collaborative measures, including sales of "HIT" solar cells
through Panasonic's sales channels on a full-fledged scale starting
from July this year, the business environment surrounding the
Panasonic Group continues to change dramatically and rapidly. While
business expansion opportunities have been presented by the rapidly
expanding environment-related and energy-related markets and the
burgeoning emerging markets, competition with Korean, Taiwanese and
Chinese companies as well as Japanese, U.S. and European companies,
etc. has intensified not only in the Digital AVC Networks segment,
but also in the fields of rechargeable battery, solar cell and
electric vehicle-related business, etc. It has become difficult for
companies to prevail over the global competition in the expanding
market without speeding up the strategy execution and implementing
all measures to demonstrate further group-wide potential. In
addition, as the collaborative measures, which are the key to
demonstrating group-wide potential, are in the execution phase, it
is expected that the results of these collaborative measures will
be achieved earlier and more steadily to maximize the effects of
such measures, through the Company making the Target its
wholly-owned subsidiary.In such circumstances, taking the proposal
of the Company as an opportunity, the Company and the Target have,
since around the end of June 2010, continuously discussed and
considered various measures to further increase the corporate value
of both companies. As a result, the Company and the Target came to
the conclusion that realizing the acceleration of decision-making
and maximization of the group synergies by making the Target a
wholly-owned subsidiary of the Company through the Tender Offer and
transactions thereafter and accelerating efforts toward becoming
the "No. 1 Green Innovation Company in the Electronics Industry"
are significantly beneficial, not only to expand the corporate
value of the Target but also to expand the corporate value of the
entire Panasonic Group. Along with such discussions and
considerations, the Company has been discussing and considering
with Panasonic Electric Works Co., Ltd. ( "Panasonic Electric
Works"), a consolidated subsidiary of the Company, and has also
come to the conclusion that making Panasonic Electric Works a
wholly-owned subsidiary are highly beneficial not only to expand
the corporate value of Panasonic Electric Works but also to expand
the corporate value of the entire Panasonic Group.
Furthermore, the three companies - the Company, Panasonic
Electric Works and the Target -– resolved, at their respective
Board of Directors meetings held on July 29, 2010, to pursue a plan
of the Company's acquisition of all shares of Panasonic Electric
Works and the Target (collectively the "Subsidiaries") in order to
make them wholly-owned subsidiaries of the Company (the
"Acquisition of All Shares of the Subsidiaries") by around April,
2011 and released the "Announcement of the Agreement toward
Panasonic's Acquisition of All Shares of Panasonic Electric Works
and SANYO." In order to implement the Acquisition of All Shares of
the Subsidiaries, the Company resolved, to simultaneously commence
a tender offer for the shares of common stock of Panasonic Electric
Works and the Tender Offer (collectively the "Tender Offers of the
Subsidiaries"). In the event that the Acquisition of All Shares of
the Subsidiaries is not achieved by the Tender Offers of the
Subsidiaries, the Company is thereafter anticipated to implement
share exchanges to make each of Panasonic Electric Works and the
Target a wholly-owned subsidiary of the Company (the "Share
Exchanges of the Subsidiaries") in order to complete the
Acquisition of All Shares of the Subsidiaries.
In future, the Company, Panasonic Electric Works and the Target
will pursue the establishment of the new Panasonic Group, under
which the three companies will be genuinely integrated, and will
make efforts to (i) maximize value creation by strengthening
contacts with customers, (ii) realize speedy and lean management,
and (iii) accelerate growth businesses by boldly shifting
management resources.
Furthermore, in order to realize these objectives, the Panasonic
Group's business organization is scheduled to be restructured by
around January 2012. From the perspective of "maximization of
customer value," the basic policy of such restructuring is to
integrate and reorganize the business and marketing divisions of
the three companies into three business sectors: "Consumer,"
"Components and Devices" and "Solutions," and to design optimal
business models that are most suitable for the character of each
business. The Company will make efforts to establish a business
organization under which it can effectively compete against global
competitors in each business and in each industry.The direction of
the reorganization of each business sector will be as follows:-
Consumer business sector:The Panasonic Group will reorganize its
marketing function on a global basis. Under the reorganization, the
Panasonic Group will enhance the function of its frontline business
and accelerate the creation of customer-oriented products. Also,
the Panasonic Group will work to strengthen, among others, its
overseas consumer business by strategically distributing its
marketing resources in Japan and overseas.- Components and Devices
business sector:The Panasonic Group will strengthen the cooperation
among the development, production and sales functions for each
component and device having a common business model. By combining
marketing and technology, the Panasonic Group will strengthen its
"proposal"-style business, which foresees the potential needs of
customers and aim to expand the business as an independent business
that does not rely on internal needs. Particularly in this business
sector, the Panasonic Group will continue to make maximum use of
the Target's strengths, such as its rechargeable batteries business
and solar business, as well as its customer network.- Solutions
business sector:The Panasonic Group will unify the development,
production and sales functions for each solution for business
customers. The Panasonic Group aims to offer the most suitable
products, services and solutions as quickly as possible, grasping
customers' needs in as timely a fashion as possible. In addition,
the "comprehensive solutions for the entire home, the entire
building and the entire town" that encompass these solutions will
be accelerated. Particularly in this business sector, the Panasonic
Group will continue to make maximum use of the strength and
customer network of Panasonic Electric Works.
In addition to the reorganization, the head office will aim for
a "lean and speedy" global head office by strengthening its
strategic functions, while integrating and streamlining the three
companies' organizations.The details of the reorganization will be
announced as soon as they are determined.
Further, together with this reorganization, Panasonic Group will
consider integrating its brands, in principle, into "Panasonic" in
the future. However, "SANYO" will continue to be partially
utilized, depending on the particular business or region.
The Company believes that the Acquisitions of All Shares of the
Subsidiaries and business reorganization mentioned above will
promote the integration of the three companies' advantages and the
"proposal" capabilities for "comprehensive solutions," and will
enable rapid increase in global competitiveness especially in the
"energy systems," "heating/refrigeration/air conditioning" and
"network AV" business, which are indicated in the GT12 as core
businesses to lead sales and profits of the entire group companies.
Also, in each business such as "healthcare," "security," and "LED,"
which is positioned as the "key business for the next generation",
the Company will make efforts to accelerate the growth of such
business by combining the capacities of the three companies for
research and development as well as market
development.Additionally, the Company intends to realize further
reinforcement of management structure and cost competitiveness
through business integration and unification of the business sites
of the three companies, and through optimizing and streamlining the
head office organization.Through these measures, the Company aims
to ensure the achievement of the targets of the midterm management
plan, GT12, which the Company announced on May 7, 2010: "10
trillion yen in sales, 5 percent or more in operating profit to
sales ratio, 10 percent in ROE, a three-year accumulative total of
over 800 billion yen in free cash flow, and 50 million ton
reduction in CO2 emissions compared to the estimated amount of
emissions (using the fiscal year 2005 as the base)" targeted for
the fiscal year ending March 2013, and further aims to exceed these
targets.
As mentioned above, for the purpose of the Acquisition of All
Shares of the Subsidiaries, the three companies - the Company,
Panasonic Electric Works and the Target - adopted a plan whereby
the Company will implement the Tender Offers of the Subsidiaries
and the Share Exchanges of the Subsidiaries (scheduled).
In the event that the "Acquisition of All Shares of the Target"
is not achieved by the Tender Offer, a share exchange to make the
Company a wholly-owning parent company and the Target a
wholly-owned subsidiary after the Tender Offer (the "Share
Exchange") is anticipated to be implemented in order to promote the
Acquisition of All Shares of the Subsidiaries. For the details of
the Share Exchange, please refer to "(4) Policies Regarding
Organizational Restructuring, etc. after the Tender Offer (Matters
Concerning the so-called "Two-Tier Purchase")" described below.
(3) Measures to Ensure the Fairness of the Tender Offer such as
Measures to Ensure the Fairness of the Tender Offer Purchase Price,
and Measures to Avoid Conflicts of Interest
Taking into consideration the fact that the Target is currently
the Company's consolidated subsidiary and the fact that there are
continuing business and personnel relationships between the Company
and the Target, the Company and the Target have implemented the
measures set forth below to ensure the fairness of the Tender Offer
such as measures to ensure the fairness of the tender offer
purchase price for the Target's share (the "Tender Offer Purchase
Price") relating to the Tender Offer and measures to avoid
conflicts of interest, etc.
(i) Procurement of a Valuation Report from an Independent,
Third-Party Valuation Institution
In order to ensure the fairness of the
Tender Offer Purchase Price, when determining the Tender Offer
Purchase Price, the Company has used as a reference a valuation
report (the "Valuation Report," Valuation Record Date: July 27,
2010) that was submitted on July 29, 2010 by Nomura Securities Co.,
Ltd. ("Nomura Securities"), the financial advisor acting as a
third-party valuation institution independent from the Company and
from the Target. The methods used by Nomura Securities were the
average market price analysis, the comparable company analysis, and
the discounted cash flow analysis (the "DCF Analysis"); the
per-share value of the Target's common stock calculated based on
each of the foregoing methods is set forth below.
(a) Average Market Price Analysis: 112 yen
to 138 yen
Based on the average market price
analysis, using July 27, 2010, as the record date, the per-share
value of the Target's common stock has been determined to be 112
yen to 138 yen, based on the respective average closing prices for
the most recent 6 months, the most recent 3 months, the most recent
1 month and the most recent 1 week, and on the closing price on the
record date of the shares of the Target's common stock on the first
section of the Tokyo Stock Exchange.
(b) Comparable Company Analysis: 46 yen to
85 yen
Based on the comparable company analysis,
the value of the Target's shares of common stock has been evaluated
by comparing the market stock prices and financial indicators that
show profitability, etc., of those listed companies that are
engaged in businesses that are relatively similar to the Target's,
and the per-share value of the Target's common stock has been
determined to be 46 yen to 85 yen.
(c) DCF Analysis: 113 yen to 233 yen
The DCF Analysis is a method of analyzing
the corporate value of the Target and the value of the Target's
shares of common stock based on its projected earnings and its
investment plans set forth in its business plans, interviews with
the Target's management, publicly disclosed information and various
other factors, etc. by discounting the Target's future free cash
flow projections to the present value using a specific discount
rate (e.g., cost of capital applicable to the Target, etc.); based
on this method, the per-share value of the Target's common stock
has been determined to be 113 yen to 233 yen.
The Company valued that the (proposed)
purchase price with respect to the Tender Offer will be 138 yen,
based on the nature and results of each of the valuation methods
set forth in the Valuation Report and the results of negotiations
and discussions with the Target, etc., and by comprehensively
taking into account various factors such as (i) results of the
business, legal, accounting and tax due diligence on the Target,
(ii) the possibility of obtaining the endorsement of the Tender
Offer by the Target's Board of Directors, (iii) market trends of
the price of the Target's common shares; and (iv) the projected
number of shares to be tendered in the Tender Offer. Thereafter,
the Company ultimately decided at the Board of Directors meeting
held on July 29, 2010, that the Tender Offer Purchase Price shall
be 138 yen, after receiving on July 29, 2010 from Nomura Securities
a fairness opinion stating that the (proposed) tender offer
purchase price of 138 yen valued through the above-mentioned
process is proper for the Company from a financial viewpoint.The
Tender Offer Purchase Price of 138 yen per-share represents a
premium of (i) 16.9% (rounded to the first decimal place; the same
shall apply to indications of percentages hereinafter in this
paragraph) over the closing price of the Target's shares of common
stock of 118 yen in ordinary trading on the first section of the
Tokyo Stock Exchange on July 28, 2010, which is the day immediately
preceding the day on which the Company announced the commencement
of the Tender Offer, (ii) 21.1% over the simple average closing
price of 114 yen (rounded down to a whole number; the same shall
apply to indications of prices in yen hereinafter in this
paragraph) in ordinary trading in the previous one-month period
(from June 29, 2010 to July 28, 2010), (iii) 9.5% over the simple
average closing price of 126 yen in ordinary trading in the
previous three-month period (from April 30, 2010 to July 28, 2010)
or (iv) 0.7% over the simple average closing price of 137 yen in
ordinary trading in the previous six-month period (from January 29,
2010 to July 28, 2010).
(ii) The Target's Procurement of a Share Valuation Report
According to the Target, the Target
requested that ABeam M&A Consulting Ltd. ("ABeam M&A
Consulting"), which is the financial advisor acting as a
third-party valuation institution independent from the Company and
from the Target, evaluate the value of the Target's shares of
common stock. Further, ABeam M&A Consulting obtained materials,
such as the Target's financial data and business plans, and
received an explanation from the Target, in order to collect and
review information necessary for analyzing the value of the
Target's shares of common stock. Based on such information, it
analyzed the value of the Target's shares based upon and subject to
certain assumptions and conditions, and submitted a valuation
report (the "Share Valuation Report," Valuation Record Date: July
28, 2010) to the Target on July 29, 2010. According to the Target,
the methods used by ABeam M&A Consulting in analyzing the value
of the Target's shares of common stock were the average market
price analysis, the comparable company analysis, and the DCF
analysis, and the per-share value of the Target's shares of common
stock calculated using each of the foregoing methods was as set
forth below.
(a) Average Market Price Analysis: 114 yen
to 140 yen
According to the Target, based on the
average market price analysis, using July 28, 2010, as the record
date, the per-share value of the Target's common stock has been
determined to be 114 yen to 140 yen, based on the respective
average closing prices and the respective volume weighted average
prices for the most recent 6 months, the most recent 3 months and
the most recent 1 month, and on the closing price on the record
date of the Target's shares of common stock on the first section of
the Tokyo Stock Exchange.
(b) Comparable Company Analysis: 78 yen to
110 yen
The comparable company analysis is a
method of evaluating the value of the shares of the Target's common
stock by comparing the market stock prices and financial indicators
that show profitability, etc., of those listed companies that are
engaged in businesses that are similar to the Target's. According
to the Target, based on this method, the per-share value of the
Target's shares of common stock has been determined to be 78 yen to
110 yen.
(c) DCF Analysis: 100 yen to 163 yen
The DCF Analysis is a method of analyzing
the corporate value of the Target and the value of the Target's
shares of common stock based on various factors such as its
projected earnings and its investment plans set forth in its
business plans, publicly disclosed information and the synergies
expected to be generated by making the Target the Company's
wholly-owned subsidiary etc., by discounting the Target's future
free cash flow projections to the present value using a specific
discount rate (e.g., cost of capital applicable to the Target,
etc.). According to the Target, based on this method, the per-share
value of the Target's common stock has been determined to be 100
yen to 163 yen.Further, according to the Target, on July 29, 2010,
as an opinion concerning the fact that the resolution of the Board
of Directors meeting of the Target to announce its opinion to
endorse the Tender Offer and to recommend that the Target's
shareholders tender their shares in the Tender Offer is not
disadvantageous to the minority shareholders of the Target, the
Board of Directors of the Target received from ABeam M&A
Consulting a fairness opinion concerning the fact that the Tender
Offer Purchase Price is not disadvantageous to the minority
shareholders of the Target, especially from a viewpoint of fairness
of consideration, stating that the Tender Offer Purchase Price of
138 yen with respect to the Tender Offer is proper to shareholders
of the Target other than tender offerors, etc. (meaning
"Controlling Shareholders and other parties set forth in the
Enforcement Regulations" provided for in Article 441-2 of the
Securities Listing Regulations of Tokyo Stock Exchange including
the Tender Offeror) from a financial point of view.
(iii) Advice from a Law Firm
According to the Target, in connection
with the discussions held, and the decisions made, by the Target's
Board of Directors, Mori Hamada & Matsumoto law firm, as the
legal advisor, has provided the Target's Board of Directors with
legal advice concerning the decision-making method, procedures,
etc. to be used by the Board of Directors, including various
procedures relating to the Tender Offer.
(iv) Approval of Directors and Auditors
with No Material Interests
According to the Target, since the Target
received a proposal concerning the Tender Offer from the Company
around the end of June 2010, the Target has discussed and
negotiated with the Company concerning the purchase price of the
Tender Offer and other terms and conditions several times, and the
Target has carefully reviewed and considered the terms and
conditions, given the contents of the Share Valuation Report and
the fairness opinion obtained from ABeam M&A Consulting, and
taking into account legal advice provided by Mori Hamada &
Matsumoto law firm, its legal advisor.As a result, at the Board of
Directors meeting held today (5 directors in attendance out of 8
directors), it was determined that the Tender Offer would
contribute to the further development of the Target's business,
that the conditions relating to the Tender Offer are appropriate,
and that the Tender Offer provided all of the Target's shareholders
with an opportunity to sell the Target's share for a reasonable
price, and therefore a resolution was adopted with the approval of
all of the directors in attendance to endorse the Tender Offer, and
to recommend that the Target's shareholders tender their shares in
the Tender Offer. Further, all of the Target's auditors who
attended the above Board of Directors' meeting (4 auditors,
including 3 outside auditors out of 5 auditors (including 3 outside
auditors)) expressed the opinion that they had no objection for the
Target's Board of Directors to endorse the Tender Offer, and to
recommend that the Target's shareholders tender their shares in the
Tender Offer.It should be noted that, according to the Target,
Messrs. Susumu Koike, Junji Esaka and Kenjiro Matsuba, directors of
the Target, because they were officers or employees of the Company
or its affiliate until 2008 (Mr. Koike) or until 2009 (Mr. Esaka
and Mr. Matsuba), and Messrs. Susume Koike and Junji Esaka are
corporate advisors of the Company at present, did not participate
in any of the discussions or voting on the Tender Offer, for the
purpose of maintaining the fairness and the neutrality of the
Target's decisions, and did not participate in any of the
discussions/negotiations with the Company on behalf of the Target.
The Company has been informed, further, that Mr. Takae Makita,
auditor of the Target, because he was an officer of the Company
until 2009, and he is a corporate advisor of the Company at
present, did not participate in the above-referenced discussions,
for the purpose of maintaining the fairness and the neutrality of
the Target's decisions.
(v) Relatively Long Period of the Tender
Offer, etc.
Pursuant to applicable laws and
regulations, the tender offer period of a tender offer is required
to be at least 20 business days; the Company has, by causing the
tender offer period of the Tender Offer to be relatively long
(i.e., 31 business days), ensured the fairness of the Tender Offer
Purchase Price by ensuring that all of the Target's shareholders
will have sufficient opportunity to consider and decide whether or
not to tender their shares in the Tender Offer, and that an
opportunity for other offerors to commence a tender offer for the
Target's shares has been secured.Further, the Company and the
Target have not made any agreement that would restrict the Target
and an offeror other than the Company to make contacts with each
other, etc., in the case where such other offeror emerges.
(4) Policies Regarding Organizational Restructuring, etc. after
the Tender Offer (Matters Concerning the so-called "Two-Tier
Purchase")
As explained in "(1) Overview of the Tender Offer" and "(2)
Description of the Decision-Making Process through which the
Decision to Implement the Tender Offer was Made and Management
Policies after the Tender Offer" above, the Company's policy is to
make the Target the Company's wholly-owned subsidiary, and the
Company plans to acquire all of the issued shares of common stock
of the Target (excluding the Target's shares owned by the Company)
through the Tender Offer and through the Share Exchange (defined
hereinafter).That is to say, if the Company does not acquire all of
the issued shares of common stock of the Target (excluding treasury
shares that the Target holds) through the Tender Offer, the Company
plans to acquire all of the issued shares of common stock of the
Target (excluding the Target's shares owned by the Company) after
the Tender Offer by implementing the Share Exchange with the Target
and the Target will become the Company's wholly-owned subsidiary.
In such way, the Company will provide the Target's shareholders
(other than the Company) with the choice of either selling their
shares at the Tender Offer Purchase Price or becoming shareholders
of the Company through the Share Exchange, which would enable them
to continuously support the Panasonic Group's efforts to realize
GT12 and to become the "No. 1 Green Innovation Company in the
Electronics Industry."It is anticipated that, in connection with
the Share Exchange, the shares of the Company's stock will be
issued in consideration for shares of the Target's common stock
owned by all of the Target's shareholders (other than the Company);
upon going through the necessary statutory procedures, all of the
Target's shares of common stock, including the Target's shares that
were not tendered in the Tender Offer (excluding the Target's
shares owned by the Company) will be exchanged for shares of the
Company's common stock, and every shareholder of the Target, to
whom not less than 1 share of the Company's share is allocated,
will become a shareholder of the Company. The Share Exchange is
planned to be implemented, and the effective date thereof is
scheduled to occur, in or around April 2011.The Share Exchange is
planned to be implemented in the form of a summary share exchange
(kani kabushiki kokan) prescribed in the main text of Article 796,
Paragraph 3 of the Companies Act, without obtaining the approval of
the Company's shareholders at a general meeting of shareholders.
Further, the Share Exchange may be implemented in the form of a
short form share exchange (ryakushiki kabushiki kokan) prescribed
in the provisions of Article 784, Paragraph 1 of the Companies Act,
without obtaining the approval of the Target's shareholders at a
general meeting of shareholders.To ensure the fairness and the
validity of the share exchange ratio applicable to the Share
Exchange, such share exchange ratio will be determined after the
completion of the Tender Offer, with reference to the share
exchange ratio evaluated by a third party valuation institution
independent from the Company and the Target, through consultations
between the Company and the Target, giving full consideration to
the interest of the Company's shareholders as well as the interest
of the Target's shareholders, respectively; however, when
determining the consideration to be received by the Target's
shareholders upon the Share Exchange (i.e., the Company's shares; provided,
however, that, if there is a fractional number of share less than
one whole share in the number of shares to be received, cash
equivalent to such fractional share shall be distributed in
accordance with the Companies Act), the Target's share is expected
to be valued based on a price equivalent to the Tender Offer
Purchase Price. In connection with the Share Exchange, any
shareholder of the Target, which will become a wholly-owned
subsidiary of the Company, will be entitled to demand that the
Target purchase the shares owned by such shareholder pursuant to
the procedures prescribed by the Companies Act and other applicable
laws and regulations. In such event, the purchase price shall
ultimately be determined by the court.
(5) Prospects for Delisting and Reasons Therefore
The Target's shares of common stock are currently listed on the
first section of the Tokyo Stock Exchange and on the first section
of the Osaka Securities Exchange. Because the Company has not set
the maximum number of shares scheduled to be purchased through the
Tender Offer, depending on the results of the Tender Offer, it is
possible that shares of the Target's common stock will be delisted
pursuant to the delisting standards of the Tokyo Stock Exchange and
the Osaka Securities Exchange, following the implementation of the
specified procedures. Further, even if the applicable criteria for
delisting are not met upon the completion of the Tender Offer, the
Company plans to make the Target its wholly-owned subsidiary
thereafter through the Share Exchange as described in "(4) Policies
Regarding Organizational Restructuring, etc. after the Tender Offer
(Matters Concerning the so-called "Two-Tier Purchase")" above, and
if such procedures are implemented, the Target's shares of common
stock will be delisted after the specified procedures are completed
pursuant to the delisting standards of the Tokyo Stock Exchange and
the Osaka Securities Exchange. After the delisting, it will be
impossible to trade the Target's shares of common stock on the
Tokyo Stock Exchange and the Osaka Securities Exchange.
(6) Matters Concerning Material Agreements between the Company
and Shareholders of the Target on the Tender in the Tender
Offer
Not applicable.
2. Outline of the Tender Offer and Other
Information
(1) Outline of the Target
(i) Corporate Name SANYO Electric Co., Ltd. (ii)
Head Office
5-5, Keihan-Hondori
2-Chome,Moriguchi City, Osaka 570-8677, Japan
(iii)
Name and Title
ofRepresentative
Executive Director and
PresidentSeiichiro Sano
(iv)
Description ofBusiness
Manufacturing and sales of various electronic equipments (v)
Paid-in Capital 322,242 million yen (as of March 31, 2010) (vi)
Date Established April 1, 1950 (vii) Major
Panasonic Corporation
50.05%
Shareholders and
Oceans Holdings Co., Ltd.
9.57%
Shareholding
Sumitomo Mitsui Banking
Corporation
3.00%
Ratio (as of March Daiwa Securities SMBC Principal Investments Co.
Ltd. 31, 2010)
1.41%
Japan Trustee Services Bank, Ltd.
(trust account)
1.03%
SANYO Electric Employees
Stockholders' Association
0.77%
Nippon Life Insurance Company
0.64%
Sumitomo Life Insurance
Company
0.49%
The Master Trust Bank of Japan,
Ltd. (trust account)
0.48%
Mitsui Sumitomo Insurance Co.,
ltd.
0.38%
(viii) Relationships between the Company and the Target:
CapitalRelationship
The Company owns 3,082,309,227
shares (50.05%) of thetotal number of issued shares of the Target
(6,158,053,099shares).
PersonnelRelationship
3 corporate advisors of the
Company assume office as adirector or an auditor of the Target.
TransactionRelationship
The Company conducts sales and
purchase transactions offinished products, merchandise, material,
etc. with theTarget.
Status as aRelated Party
The Company is the Target's parent
company, and therefore,the Target is a Related Party of the
Company.
(2) Tender Offer Period
(i) Tender Offer Period
determined at time of filing of the Statement
From August 23,
2010 (Monday) through October 6, 2010 (Wednesday) (31 business
days)
(ii) Possible extension of
Tender Offer Period at Target’s request
Not
applicable.
(3) Tender Offer Purchase Price
138 yen per share of common stock
(4) Calculation Base, Etc. of Tender Offer Purchase Price
(i) Basis of Calculation
In order to ensure the fairness of the
Tender Offer Purchase Price, when determining the Tender Offer
Purchase Price, the Company has used as a reference the Valuation
Report that was submitted on July 29, 2010 by Nomura Securities,
the financial advisor acting as a third-party valuation institution
independent from the Company and from the Target. The methods used
by Nomura Securities were the average market price analysis, the
comparable company analysis, and the DCF Analysis; the per-share
value of the Target's common stock calculated based on each of the
foregoing methods is set forth below.
(a) Average Market Price Analysis: 112 yen
to 138 yen
Based on the average market price
analysis, using July 27, 2010, as the record date, the per-share
value of the Target's common stock has been determined to be 112
yen to 138 yen, based on the respective average closing prices for
the most recent 6 months, the most recent 3 months, the most recent
1 month and the most recent 1 week, and on the closing price on the
record date of the shares of the Target's common stock on the first
section of the Tokyo Stock Exchange.
(b) Comparable Company Analysis: 46 yen to
85 yen
Based on the comparable company analysis,
the value of the Target's shares of common stock has been evaluated
by comparing the market stock prices and financial indicators that
show profitability, etc., of those listed companies that are
engaged in businesses that are relatively similar to the Target's,
and the per-share value of the Target's common stock has been
determined to be 46 yen to 85 yen.
(c) DCF Analysis: 113 yen to 233 yen
The DCF Analysis is a method of analyzing
the corporate value of the Target and the value of the Target's
shares of common stock based on its projected earnings and its
investment plans set forth in its business plans, interviews with
the Target's management, publicly disclosed information and various
other factors, etc. by discounting the Target's future free cash
flow projections to the present value using a specific discount
rate (e.g., cost of capital applicable to the Target, etc.); based
on this method, the per-share value of the Target's common stock
has been determined to be 113 yen to 233 yen.
The Company valued that the (proposed)
purchase price with respect to the Tender Offer will be 138 yen,
based on the nature and results of each of the valuation methods
set forth in the Valuation Report and the results of negotiations
and discussions with the Target, etc., and by comprehensively
taking into account various factors such as (i) results of the
business, legal, accounting and tax due diligence on the Target,
(ii) the possibility of obtaining the endorsement of the Tender
Offer by the Target's Board of Directors, (iii) market trends of
the price of the Target's common shares; and (iv) the projected
number of shares to be tendered in the Tender Offer. Thereafter,
the Company ultimately decided at the Board of Directors meeting
held on July 29, 2010, that the Tender Offer Purchase Price shall
be 138 yen, after receiving on July 29, 2010 from Nomura Securities
a fairness opinion stating that the (proposed) tender offer
purchase price of 138 yen valued through the above-mentioned
process is proper for the Company from a financial viewpoint.The
Tender Offer Purchase Price of 138 yen per-share represents a
premium of (i) 16.9% (rounded to the first decimal place; the same
shall apply to indications of percentages hereinafter in this
paragraph) over the closing price of the Target's shares of common
stock of 118 yen in ordinary trading on the first section of the
Tokyo Stock Exchange on July 28, 2010, which is the day immediately
preceding the day on which the Company announced the commencement
of the Tender Offer, (ii) 21.1% over the simple average closing
price of 114 yen (rounded down to a whole number; the same shall
apply to indications of prices in yen hereinafter in this
paragraph) in ordinary trading in the previous one-month period
(from June 29, 2010 to July 28, 2010), (iii) 9.5% over the simple
average closing price of 126 yen in ordinary trading in the
previous three-month period (from April 30, 2010 to July 28, 2010)
or (iv) 0.7% over the simple average closing price of 137 yen in
ordinary trading in the previous six-month period (from January 29,
2010 to July 28, 2010).
(ii) Process of calculation(Process to determine the Tender
Offer Purchase Price)
Although the Company and the Target have
already shared a management strategy as group companies and have
implemented various collaborative measures, including sales of "HIT
solar" batteries through Panasonic's sales channels on a
full-fledged scale starting from July this year, the business
environment surrounding the Panasonic Group continues to change
dramatically and rapidly. While business expansion opportunities
have been presented by the rapidly expanding environment-related
and energy-related markets and the burgeoning emerging markets,
competition with Korean, Taiwanese and Chinese companies, as well
as Japanese, U.S. and European companies, etc. has intensified not
only in the Digital AVC Networks segment, but also in the fields of
rechargeable battery, solar cell and electric vehicle-related
business, etc. It has become difficult for companies to prevail
over the global competition in the expanding market without
speeding up the strategy execution and implementing all measures to
demonstrate further group-wide potential.
In such circumstances, taking the proposal
of the Company as an opportunity, the Company and the Target have,
since around the end of June 2010, continuously discussed and
considered various measures to further increase the corporate value
of both companies. As a result, the Company and the Target came to
the conclusion that realizing the acceleration of decision-making
and maximization of the group synergies by making the Target a
wholly-owned subsidiary of the Company through the Tender Offer and
transactions thereafter and accelerating efforts toward becoming
the "No. 1 Green Innovation Company in the Electronics Industry"
are significantly beneficial, not only to expand the corporate
value of the Target but also to expand the corporate value of the
entire Panasonic Group. Therefore, the Company decided to commence
the Tender Offer, and through the process described below,
determined the Tender Offer Purchase Price.
(a) Name of the Third-Party from which the
Company received the Opinion in the Process of Calculation
In determining the Tender Offer Purchase
Price, around June 2010, the Company requested Nomura Securities,
the financial advisor acting as a third-party valuation institution
and independent from the Company and the Target, to calculate the
value of the Target's shares of common stock, and the Company
received the Valuation Report from Nomura Securities on July 29,
2010. In addition, the Company received the fairness opinion from
Nomura Securities on July 29, 2010, stating that the Tender Offer
Purchase Price of 138 yen is proper for the Company from a
financial viewpoint.
(b) Summary of the Opinion
Nomura Securities calculated the value of
the Target's shares of common stock by using the average market
price analysis, the comparable company analysis, and the DCF
analysis; the per-share value of the Target's shares of common
stock calculated based on each of the foregoing methods is set
forth below.
Average Market Price Analysis: 112 yen to
138 yenComparable Company Analysis: 46 yen to 85 yenDCF Analysis:
113 yen to 233 yen
(c) Process to determine the Tender Offer
Purchase Price based on the Opinion
The Company ultimately decided at the
Board of Directors meeting held on July 29, 2010 that the Tender
Offer Purchase Price shall be 138 yen, based on the nature and
results of each of the valuation methods set forth in the Valuation
Report and the results of negotiations and discussions with the
Target, etc., and by comprehensively taking into account various
factors such as (i) results of the business, legal, accounting and
tax due diligence, (ii) the possibility of obtaining the
endorsement of the Tender Offer by the Target's Board of Directors,
(iii) market trends of the price of the Target's shares of common
stock; and (iv) the projected number of shares to be tendered in
the Tender Offer.
(Measures to Ensure the Fairness of the Tender Offer such as
Measures to Ensure the Fairness of the Tender Offer Purchase Price,
and Measures to Avoid Conflicts of Interest)
Taking into consideration the fact that
the Target is currently the Company's consolidated subsidiary and
the fact that there are continuing business and personnel
relationships between the Company and the Target, the Company and
the Target have implemented the measures set forth below to ensure
the fairness of the Tender Offer such as measures to ensure the
fairness of the Tender Offer Purchase Price for the Target's shares
of common stock relating to the Tender Offer and measures to avoid
conflicts of interest, etc.
(a) Procurement of a Valuation Report from
an Independent, Third-Party Valuation Institution
In order to ensure the fairness of the
Tender Offer Purchase Price, when determining the Tender Offer
Purchase Price, the Company has used as a reference the Valuation
Report that was submitted on July 29, 2010 by Nomura Securities,
the financial advisor acting as a third-party valuation institution
independent from the Company and from the Target.
(b) The Target's Procurement of a Share
Valuation Report
According to the Target, the Target
requested that ABeam M&A Consulting, which is the financial
advisor acting as a third-party valuation institution independent
from the Company and from the Target, evaluate the value of the
Target's shares of common stock. Further, ABeam M&A Consulting
obtained materials, such as the Target's financial data and
business plans, and received an explanation from the Target, in
order to collect and review information necessary for analyzing the
value of the Target's shares of common stock. Based on such
information, it analyzed the value of the Target's shares based
upon and subject to certain assumptions and conditions, and
submitted the Share Valuation Report to the Target on July 29,
2010. According to the Target, the methods used by ABeam M&A
Consulting in analyzing the value of the Target's shares of common
stock were the average market price analysis, the comparable
company analysis, and the DCF analysis, and the per-share value of
the Target's shares of common stock calculated using each of the
foregoing methods was as set forth below.
x. Average Market Price Analysis: 114 yen
to 140 yen
According to the Target, based on the
average market price analysis, using July 28, 2010, as the record
date, the per-share value of the Target's common stock has been
determined to be 114 yen to 140 yen, based on the respective
average closing prices and the respective volume weighted average
prices for the most recent 6 months, the most recent 3 months and
the most recent 1 month, and on the closing price on the record
date of the Target's shares of common stock on the first section of
the Tokyo Stock Exchange.
y. Comparable Company Analysis: 78 yen to
110 yen
The comparable company analysis is a
method of evaluating the value of the shares of the Target's common
stock by comparing the market stock prices and financial indicators
that show profitability, etc., of those listed companies that are
engaged in businesses that are similar to the Target's. According
to the Target, based on this method, the per-share value of the
Target's shares of common stock has been determined to be 78 yen to
110 yen.
z. DCF Analysis: 100 yen to 163 yen
The DCF Analysis is a method of analyzing
the corporate value of the Target and the value of the Target's
shares of common stock based on various factors such as its
projected earnings and its investment plans set forth in its
business plans, publicly disclosed information and the synergies
expected to be generated by making the Target the Company's
wholly-owned subsidiary etc., by discounting the Target's future
free cash flow projections to the present value using a specific
discount rate (e.g., cost of capital applicable to the Target,
etc.). According to the Target, based on this method, the per-share
value of the Target's common stock has been determined to be 100
yen to 163 yen.
Further, according to the Target, on July
29, 2010, as an opinion concerning the fact that the resolution of
the Board of Directors meeting of the Target to announce its
opinion to endorse the Tender Offer and to recommend that the
Target's shareholders tender their shares in the Tender Offer is
not disadvantageous to the minority shareholders of the Target, the
Board of Directors of the Target received from ABeam M&A
Consulting, especially from a viewpoint of fairness of
consideration, a fairness opinion concerning the fact that the
Tender Offer Purchase Price is not disadvantageous to the minority
shareholders of the Target, stating that the Tender Offer Purchase
Price of 138 yen with respect to the Tender Offer is proper to
shareholders of the Target other than tender offerors, etc.
(meaning "Controlling Shareholders and other parties set forth in
the Enforcement Regulations" provided for in Article 441-2 of the
Securities Listing Regulations of Tokyo Stock Exchange including
the Tender Offeror) from a financial point of view.
(c) Advice from a Law Firm
According to the Target, in connection
with the discussions held, and the decisions made, by the Target's
Board of Directors, Mori Hamada & Matsumoto law firm, as the
legal advisor, has provided the Target's Board of Directors with
legal advice concerning the decision-making method, procedures,
etc. to be used by the Board of Directors, including various
procedures relating to the Tender Offer.
(d) Approval of Directors and Auditors
with No Material Interests
According to the Target, since the Target
received a proposal concerning the Tender Offer from the Company
around the end of June 2010, the Target has discussed and
negotiated with the Company concerning the purchase price of the
Tender Offer and other terms and conditions several times, and the
Target has carefully reviewed and considered the terms and
conditions, given the contents of the Share Valuation Report and
the fairness opinion obtained from ABeam M&A Consulting, and
taking into account legal advice provided by Mori Hamada &
Matsumoto law firm, its legal advisor.
As a result, at the Board of Directors'
meeting held today (5 directors in attendance out of 8 directors),
it was determined that the Tender Offer would contribute to the
further development of the Target's business, that the conditions
relating to the Tender Offer are appropriate, and that the Tender
Offer provided all of the Target's shareholders with an opportunity
to sell the Target's share for a reasonable price, and therefore a
resolution was adopted with the approval of all of the directors in
attendance to endorse the Tender Offer, and to recommend that the
Target's shareholders tender their shares in the Tender Offer.
Further, all of the Target's auditors who attended the above Board
of Directors' meeting (4 auditors, including 3 outside auditors out
of 5 auditors (including 3 outside auditors)) expressed the opinion
that they had no objection for the Target's Board of Directors to
endorse the Tender Offer, and to recommend that the Target's
shareholders tender their shares in the Tender Offer.
It should be noted that, according to the
Target, Messrs. Susumu Koike, Junji Esaka and Kenjiro Matsuba,
directors of the Target, because they were officers or employees of
the Company or its affiliate until 2008 (Mr. Koike) or until 2009
(Mr. Esaka and Mr. Matsuba), and Messrs. Susume Koike and Junji
Esaka are corporate advisors of the Company at present, did not
participate in any of the discussions or voting on the Tender
Offer, for the purpose of maintaining the fairness and the
neutrality of the Target's decisions, and did not participate in
any of the discussions/negotiations with the Company on behalf of
the Target. The Company has been informed, further, that Mr. Takae
Makita, auditor of the Target, because he was an officer of the
Company until 2009, and he is a corporate advisor of the Company at
present, did not participate in the above-referenced discussions,
for the purpose of maintaining the fairness and the neutrality of
the Target's decisions.
(e) Relatively Long Period of the Tender
Offer, etc.
Pursuant to applicable laws and
regulations, the tender offer period of a tender offer is required
to be at least 20 business days; the Company has, by causing the
tender offer period of the Tender Offer to be relatively long
(i.e., 31 business days), ensured the fairness of the Tender Offer
Purchase Price by ensuring that the Target's shareholders will have
sufficient opportunity to consider and decide whether or not to
tender their shares in the Tender Offer, and that an opportunity
for other offerors to commence a tender offer for the Target's
shares has been secured.Further, the Company and the Target have
not made any agreement that would restrict the Target and an
offeror other than the Company to make contacts with each other,
etc., in the case where such other offeror emerges.
(iii) Relationship with Valuation Institution
Nomura Securities, which is acting as the
financial advisor (the valuation institution) to the Company, does
not have any material interest in the Tender Offer.
(5) Number of Share Certificates,
Etc. Scheduled to be Purchased
Number of sharesscheduled to
bepurchased
Minimum number of sharesscheduled
to be purchased
Maximum number ofshares scheduled
to bepurchased
3,059,465,509 shares Not applicable Not applicable
Note 1) No minimum or maximum number of share certificates,
etc. scheduled to be purchased has been established in the Tender
Offer. The Company will purchase all of the share certificates,
etc. tendered in the Tender Offer. Note 2) The number of
shares scheduled to be purchased (3,059,465,509 shares) is
calculated by deducting the sum of the number of shares of the
Target held by the Tender Offeror as of July 29, 2010
(3,082,309,227 shares) and the number of treasury shares held by
the Target as of March 31, 2010 as described in the securities
report for the 86th term that was submitted by the Target on June
23, 2010 (16,278,363 shares), from the number of issued shares as
of March 31, 2010, as described in the securities report for the
86th term that was submitted by the Target on June 23, 2010
(6,158,053,099 shares). Note 3) Shares less than one unit
are also subject to the Tender Offer. If a shareholder exercises
the right to demand the purchase of shares less than one unit
pursuant to the Companies Act, the Target may purchase its own
shares during the tender offer period pursuant to the procedures
required under the applicable laws and regulations. Note 4)
The Tender Offeror does not plan to purchase treasury shares held
by the Target through the Tender Offer.
(6) Change in Ownership Percentage
of Share Certificates, Etc. as a Result of Tender Offer
Number of Voting RightsRepresented
by ShareCertificates, Etc. Held bythe Tender Offeror beforethe
Tender Offer
3,082,309 units
(Ownership Percentage ofShare
Certificates, Etc.before the Tender Offer:50.19%)
Number of Voting RightsRepresented
by ShareCertificates, Etc. Held bySpecial Related Parties before
the Tender Offer
Not determined yet
(Ownership Percentage ofShare
Certificates, Etc.before the Tender Offer:Not determined yet)
Number of Voting RightsRepresented
by ShareCertificates, Etc.Scheduled to bePurchased
3,059,465 units
(Ownership Percentage ofShare
Certificates, Etc.after the Tender Offer:100.00%)
Total Number of VotingRights of
Shareholders,Etc. of the Target
6,130,300 units Note 1) The "Number of Voting Rights
Represented by Share Certificates, Etc. Scheduled to be Purchased,"
is the number of voting rights relating to share certificates, etc.
scheduled to be purchased for the Tender Offer. Note 2) The "Number
of Voting Rights Represented by Share Certificates, Etc. Held by
Special Related Parties before the Tender Offer" is not determined
at present, but will be examined and is scheduled to be disclosed
until August 23, 2010, which is the commencement date of the Tender
Offer. Note 3) The "Total Number of Voting Rights of Shareholders,
Etc. of the Target" is the total number of voting rights of all
shareholders as of March 31, 2010 as described in the securities
report for the 86th term that was submitted by the Target on June
23, 2010 (indicated therein as 1,000 shares per unit). However,
since the shares less than one unit and cross-held shares are also
subject to the Tender Offer, in calculating the "Ownership
Percentage of Share Certificates, Etc. before the Tender Offer" and
the "Ownership Percentage of Share Certificates, Etc. after the
Tender Offer," the total number of voting rights (6,141,774 units),
corresponding to the number of shares (6,141,774,736 shares)
obtained by deducting the number of treasury shares held by the
Target as of March 31, 2010 as described in the securities report
for the 86th term that was submitted by the Target on June 23, 2010
(16,278,363 shares), from the total number of shares issued as of
March 31, 2010 as described in the securities report for the 86th
term that was submitted by the Target on June 23, 2010
(6,158,053,099 shares), is used as the denominator. Note 4) The
"Ownership Percentage of Share Certificates, Etc. before the Tender
Offer" and the "Ownership Percentage of Share Certificates, Etc.
after the Tender Offer" are rounded to the second decimal place.
(7) Payment for Purchase 422,206 million yen
(8) Method of Settlement
(i) Names and addresses of the head offices of the financial
instruments dealers and banks, etc. responsible for settlement of
purchase, etc.
Nomura Securities Co., Ltd.9-1, Nihonbashi
1-chome, Chuo-ku, Tokyo
(ii) Tender Offer settlement commencement date
October 14, 2010 (Thursday)
(iii) Method of settlement
A notice of purchase, etc. through the
Tender Offer shall be mailed to the addresses of the tendering
shareholders, etc. (or to the addresses of the standing proxies in
the case of non-resident shareholders, etc.) without delay after
the expiry of the tender offer period (except where the shares were
tendered via NOMURAJOY, the exclusive Internet service provided by
the tender offer agent). In the case where the shares were tendered
via NOMURAJOY, a notice of purchase will be delivered by the means
prescribed on NOMURAJOY's website
(https://www.nomurajoy.jp/).Payment for the shares will be made in
cash. The tendering shareholders, etc. will receive the sales
proceeds resulting from the Tender Offer through the methods
designated by the tendering shareholders, etc., such as remittance
(the tendering shareholders, etc. may be liable for remittance
charges).
(iv) Method of returning share certificates, etc.
In the event that all of the tendered
share certificates, etc. are not purchased under the terms and
conditions mentioned in "(ii) Conditions of withdrawal, etc. of
Tender Offer, details thereof and method of disclosure of
withdrawal, etc." of "(9) Other Conditions and Methods of Purchase,
Etc." provided below, the share certificates, etc. required to be
returned will be returned promptly on or after the commencement
date of the settlement (or the date of withdrawal, etc. in the
event of a withdrawal, etc. of the Tender Offer) by way of
restoring the record of the shares back to the state that existed
immediately prior to the relevant tender. (If the tendering
shareholders, etc. would like to transfer the record of the share
certificates, etc. to an account established with any other
financial instruments dealer, etc., please indicate
accordingly.)
(9) Other Conditions and Methods of Purchase, Etc.
(i) Conditions set forth in each Item of Article 27-13,
Paragraph 4 of the Financial Instruments and Exchange Act (Act No.
25 of 1948, as amended, the "Act")
A maximum or minimum number of the share
certificates, etc. scheduled to be purchased has not been
established in the Tender Offer. Therefore, the Tender Offeror will
purchase all of the tendered share certificates, etc.
(ii) Conditions of withdrawal, etc. of Tender Offer, details
thereof and method of disclosure of withdrawal, etc.
Upon the occurrence of any event listed in
Article 14, Paragraph 1, Items 1.1 through 1.9, Items 1.12 through
1.18, Items 3.1 through 3.8, and Item 4, and in Article 14,
Paragraph 2, Items 3 through 6 of the Financial Instruments and
Exchange Act Enforcement Ordinance of Japan (Governmental Ordinance
No.321 of 1965, as amended, the "Enforcement Order"), the Tender
Offeror may withdraw the Tender Offer. In the event that the Tender
Offeror intends to withdraw the Tender Offer, the Tender Offeror
shall give public notice electronically and then post notice in the
Nihon Keizai Shimbun that such public notice has been made;
provided, however, that, if it is impracticable to give such notice
by the last day of the tender offer period, the Tender Offeror
shall make a public announcement pursuant to Article 20 of the
Cabinet Office Ordinance on Disclosure of Takeover Bids of Shares
Conducted by Non-Issuers (Ministry of Finance Japan Ordinance No.38
of 1990, as amended, the "TOB Order") and give public notice
immediately thereafter.
(iii) Conditions for reduction of price of purchase etc. details
thereof and method of disclosure of reduction
Pursuant to Article 27-6, Paragraph 1,
Item 1 of the Act, if the Target takes any action enumerated in
Article 13, Paragraph 1 of the Enforcement Order during the tender
offer period, the Tender Offeror may reduce the price of purchase
etc. in accordance with the methods provided for in Article 19,
Paragraph 1 of the TOB Order. In the event that the Tender Offeror
intends to reduce the price of purchase, etc., the Tender Offeror
shall give public notice electronically, and then post notice in
the Nihon Keizai Shimbun that such public notice has been made;
provided, however, that, if it is impracticable to give such notice
by the last day of the tender offer period, the Tender Offeror
shall make a public announcement pursuant to Article 20 of the TOB
Order and give public notice immediately thereafter. If the price
of purchase, etc. is reduced, the Tender Offeror shall purchase any
and all tendered share certificates, etc. at such reduced price,
even if such share certificates, etc. were tendered prior to such
public notice.
(iv) Matters concerning tendering shareholders, etc. right of
cancellation of the tender
Tendering shareholders, etc. may cancel a
tender of the Tender Offer at any time during the tender offer
period. Tendering shareholders, etc. who wish to cancel their
tenders must deliver, or send by mail, a cancellation notice
stating that such tendering shareholder, etc. hereby cancels
his/her tender of the Tender Offer (the "Cancellation Notice") and
the receipt of tender for the Tender Offer to the head office or
any branch (excluding NOMURAJOY, which is an exclusive Internet
service used by the tender offer agent) of the tender offer agent
in Japan that accepted the tender, by 3:30 p.m. on the last day of
the tender offer period. Please note that the Cancellation Notice
must be received by 3:30 p.m. on the last day of the tender offer
period if sent by mail. If tendering shareholders, etc. wish to
cancel any tender made via NOMURAJOY, please have them complete the
cancellation procedures through the process shown on the website of
NOMURAJOY (https://www.nomurajoy.jp/) by 3:30 p.m. on the last day
of the tender offer period. No compensation for damages or penalty
payments shall be claimed against any tendering shareholders, etc.
by the Tender Offeror in the event that the tender by such
tendering shareholders is cancelled. The cost of returning the
tendered share certificates, etc. shall also be borne by the Tender
Offeror.
(v) Method of disclosure if the terms and conditions, etc. of
the Tender Offer are changed
If any terms or conditions, etc. of the
Tender Offer are to be changed, the Tender Offeror shall give
public notice electronically regarding the details, etc. of such
changes and then post notice in the Nihon Keizai Shimbun that such
public notice has been made; provided, however, that, if it is
impracticable to give such notice by the last day of the tender
offer period, the Tender Offeror shall make a public announcement
pursuant to Article 20 of the TOB Order and give public notice
immediately thereafter. If any change is made to the terms and
conditions of the Tender Offer, the Tender Offeror shall purchase
any and all tendered share certificates, etc. in accordance with
the amended terms and conditions, etc., even if such share
certificates, etc. were tendered prior to such public notice.
(vi) Method of disclosure if amendment statement is filed
If an amendment statement is filed with
the Director-General of the Kanto Local Finance Bureau, except for
the case provided for in the proviso of Article 27-8, Paragraph 11
of the Act, the Tender Offeror shall forthwith make a public
announcement of the contents thereof that pertain to the contents
of the Public Notice of the Commencement of Tender Offer, in
accordance with the method set forth in Article 20 of the TOB
Order. The Tender Offeror shall also forthwith amend the tender
offer explanatory statement and deliver the amended tender offer
explanatory statement to the tendering shareholders, etc. who have
already received the tender offer explanatory statement; provided,
however, that, if the scope of the amendment is narrow, the Tender
Offeror will instead prepare a document stating the reason(s) for
the amendment, the matters amended and the contents as amended and
deliver said document to the tendering shareholders, etc.
(vii) Method of disclosure of results of the Tender Offer
The Tender Offeror shall make a public
announcement regarding the results of the Tender Offer, in
accordance with the methods provided for in Article 9-4 of the
Enforcement Order and Article 30-2 of the TOB Order, on the day
immediately following the last day of the Tender Offer Period.
(10) Date of the Public Notice of the Commencement of Tender
Offer
August 23, 2010 (Monday)
(11) Tender Offer Agent
Nomura Securities Co., Ltd.9-1, Nihonbashi
1-chome, Chuo-ku, Tokyo
3. Policies, Etc. After the
Tender Offer and Prospects for the Future
(1) Policies, etc. subsequent to the Tender Offer
With respect to the policies, etc. after
the Tender Offer, please refer to "1. Purpose of the Tender
Offer."
(2) Prospect of the impact on future performance
The impact of the Tender Offer on the
performance of the Panasonic Group will be reported as soon as it
is ascertained.
4. Other
Matters
(1) Agreements between the Tender Offeror and the Target or its
Directors, and a Summary thereof
According to the Target, in the Board of Directors meeting of
the Target held today, a resolution to endorse the Tender Offer and
to recommend that the Target's shareholders tender their shares in
the Tender Offer was adopted.
In detail, according to the Target, since the Target received a
proposal concerning the Tender Offer from the Company around the
end of June 2010, the Target has discussed and negotiated with the
Company concerning the purchase price of the Tender Offer and other
terms and conditions several times, and the Target has carefully
reviewed and considered the terms and conditions, given the
contents of the Share Valuation Report and the fairness opinion
obtained from ABeam M&A Consulting, and taking into account
legal advice provided by Mori Hamada & Matsumoto law firm, its
legal advisor.As a result, at the Board of Directors meeting held
today (5 directors in attendance out of 8 directors), it was
determined that the Tender Offer would contribute to the further
development of the Target's business, that the conditions relating
to the Tender Offer are appropriate, and that the Tender Offer
provided all of the Target's shareholders with an opportunity to
sell the Target's share for a reasonable price, and therefore a
resolution was adopted with the approval of all of the directors in
attendance to endorse the Tender Offer, and to recommend that the
Target's shareholders tender their shares in the Tender Offer.
Further, all of the Target's auditors who attended the above Board
of Directors' meeting (4 auditors, including 3 outside auditors out
of 5 auditors (including 3 outside auditors))expressed the opinion
that they had no objection for the Target's Board of Directors to
endorse the Tender Offer, and to recommend that the Target's
shareholders tender their shares in the Tender Offer.
It should be noted that, according to the Target, Messrs. Susumu
Koike, Junji Esaka and Kenjiro Matsuba, directors of the Target,
because they were officers or employees of the Company or its
affiliate until 2008 (Mr. Koike) or until 2009 (Mr. Esaka and Mr.
Matsuba), and Messrs. Susume Koike and Junji Esaka are corporate
advisors of the Company at present, did not participate in any of
the discussions or voting on the Tender Offer, for the purpose of
maintaining the fairness and the neutrality of the Target's
decisions, and did not participate in any of the
discussions/negotiations with the Company on behalf of the Target.
The Company has been informed, further, that Mr. Takae Makita,
auditor of the Target, because he was an officer of the Company
until 2009, and he is a corporate advisor of the Company at
present, did not participate in the above-referenced discussions,
for the purpose of maintaining the fairness and the neutrality of
the Target's decisions.
As for the "Decision-Making Process through which the Decision
to Implement the Tender Offer was made" and "Details of the
Measures to Avoid Conflicts of Interest," please refer to "(2)
Description of the Decision-Making Process through which the
Decision to Implement the Tender Offer was made and Management
Policies after the Tender Offer" and "(3) Measures to Ensure the
Fairness of the Tender Offer such as Measures to Ensure the
Fairness of the Tender Offer Purchase Price, and Measures to Avoid
Conflicts of Interest" under "1. Purpose of the Tender Offer."
(2) Other Relevant information Necessary for Investor's Decision
of the Target
(i) As announced in "ON Semiconductor to Acquire SANYO
Semiconductor from SANYO Electric in Strategic Transaction"
(http://sanyo.com/news/2010/07/15-1.html) on July 15, 2010, the
Target passed a resolution to enter into a purchase agreement
pursuant to which the Target agreed to transfer all of the shares
it holds in the Target's consolidated subsidiary, SANYO
Semiconductor Co., Ltd. and the loan receivables held by the Target
against SANYO Semiconductor Co., Ltd. to Semiconductor Components
Industries LLC, the head office of which is located in the State of
Arizona, USA. Semiconductor Components Industries LLC is a
wholly-owned subsidiary of ON Semiconductor Corporation, the head
office of which is located in the State of Arizona, USA, and which
is listed on NASDAQ. According to the Target's announcement, the
purchase price is planned to be approximately 33.0 billion yen, and
is subject to adjustment, which will be made based on amounts of
cash and deposit, etc. that exist as of the closing date.
(ii) According to the press release announced by the Target on
July 16, 2010, titled "Notice Concerning Change of Subsidiary
(SANYO Electric Logistics Co., Ltd.)," the Target accepted a tender
offer to be made by LS Holdings Co., Ltd., a company owned by an
investment fund managed by the Longreach Group for all of the
shares it holds in the Target's consolidated subsidiary, SANYO
Electric Logistics Co., Ltd., and, as a result of the successful
completion of the same tender offer, SANYO Electric Logistics Co.,
Ltd. will be changed from the Target's subsidiary to the subsidiary
of LS Holdings Co., Ltd. on July 30, 2010, the settlement date of
the tender offer. According to the press release, owing to the
transfer of share as a result of the successful completion of the
tender offer, the Target expects to post 9.4 billion yen for
non-consolidated financial results and 4.2 billion yen for
consolidated financial results as capital gain in the financial
results for fiscal year ending March 2011.
(iii) The Target announced its "Consolidated Financial Results
for the First Quarter of Fiscal Year ending March 2011" on July 28,
2010. According to the announcement, the Target's consolidated
business results for the first quarter of the fiscal year ending
March 2011 are as follows. The information below has not been
audited by the Target's audit firm pursuant to Article 193-2 of the
Act. In addition, the information below is extracted from the
announcement made by the Target, and the Company is not in a
position to verify the accuracy and the validity thereof and has
not verified the same.
The Consolidated Business Results for the First Quarter of the
Fiscal Year ending March 2011(April 1, 2010 through June 30,
2010)(a) Consolidated Business Results (Cumulative)
(Unit: Millions of Yen)
Three months ended June
30,2010
Net sales 387,392 Operating income (loss) 13,948
Income (loss) from
continuingoperations, before income taxes
12,290 (b) Consolidated Financial Position As
of June 30, 2010 Total assets (Millions of Yen) 1,350,944
Stockholders' equity (Millions
ofYen)
109,209
Stockholders' equity ratio
8.1%
Stockholders' equity per
share(Yen)
17.78
(iv) The Target announced its "Revision to Forecast for the 1st
Six-month of the Fiscal Year ending March 2011" on July 28, 2010.
The summary of the announcement is as follows. The information
below is extracted from the announcement made by the Target, and
the Company is not in a position to verify the accuracy and the
validity thereof and has not verified the same.
(The content of the announcement made by
the Target)SANYO Electric Co., Ltd. (SANYO) has revised its
forecast for first six-months of the Fiscal Year ending March 31,
2011 (FY2011; for the period from April 1, 2010 through September
30, 2010) announced on May 6, 2010.
1.
Forecast for Consolidated Financial Results
(Unit: Millions of yen)
Net sales Operating income
Income (loss)
fromcontinuingoperations, beforeincome taxes
Previous Forecast (A) 850,000 11,000 3,000 Current Forecast (B)
820,000 24,000 22,000 Change (B-A) (30,000) 13,000 19,000 Change
(%) (3.5) 118.2 633.3
Six-months ofFY2011 ended Sep.30,
2010
766,404 6,468 (28,903)
Previous forecast announced on May
6, 2010.
2. Reasons for
Revision
Regarding the forecast for the first
six-months of fiscal year ending March 2011(FY2011), the operating
income is expected to surpass previous forecasts thanks to a
combination of improved results in photovoltaic systems, optical
pickups, capacitors, and car electronics businesses and group-wide
cost reduction activities. In addition, income from continuing
operations, before income taxes and net income attributable to
SANYO are expected to show significant increases from increase in
the operating income and expected capital gain due to the stock
transfer of SANYO Electric Logistics Co., Ltd. which is planned to
be done in the second quarter of FY2011. As a result, the forecast
for the first six-months of FY2011 has been largely revised upward.
For net sales, approximately 57 billion yen is excluded in
accordance with the semiconductor business being classified as
discontinued operation.
The full year forecast for FY2011 will,
however, remain the same, due to the uncertain economic situation
in Europe and United States and uncertain foreign exchange rate
fluctuation which are expected to continue.
* The semiconductor business has been a
discontinued operation since first quarter of the FY2011. In
accordance with this, any figures attribute to the semiconductor
business which is classified as discontinued operation in
accordance with United States Generally Accepted Accounting
Principles (U.S.G.A.A.P), is excluded from revised net sales,
operating income, and income before income taxes and attributable
to noncontrolling interests from continuing operations.
Accordingly, SANYO has reclassified the results of first six-months
of the Fiscal Year ended March 31, 2010.
(Insider Trading Regulations) In accordance with the
provisions of Article 167, Paragraph 3 of the Financial Instruments
and Exchange Act and Article 30 of its Enforcement Order, anyone
having read this Press Release is considered a primary recipient of
information from the viewpoint of insider trading regulation. The
Company accordingly urges you to exercise due care as you may be
prohibited from purchasing the shares of SANYO Electric Co., Ltd.
before 12 hours have passed from the time of the announcement of
this Press Release (announcement of this Press Release shall be
deemed to be the time at which this Press Release is disclosed
through the service for inspection of disclosed information by
Tokyo Stock Exchange at 3:30 p.m. of July 29, 2010). If you are
held liable under criminal, civil, or administrative laws for
making such a prohibited purchase, the Company notes that it will
assume no responsibility whatsoever. (Restrictions on
Solicitation) This Press Release is to announce the Company and has
not been prepared for the purpose of soliciting an offer to sell
shares. If shareholders wish to make an offer to sell their shares,
they should first read the Tender Offer Explanatory Statement for
the Tender Offer and offer their shares for sale at their own
discretion. This Press Release shall neither be, nor constitute a
part of, an offer to sell or solicitation thereof, or a
solicitation of an offer to purchase, any securities, and neither
this Press Release (or a part thereof) nor its distribution shall
be interpreted to be the basis of any agreement in relation to the
Tender Offer, and this Press Release should not be relied on at the
time of concluding any such agreement. (Prospect) This Press
Release describes prospects based on the views of the management of
the Company at the time the Company acquires the shares of SANYO
Electric Co., Ltd. Actual results may deviate considerably from
such descriptions due to various factors. (In other Nation)
There may be some nations or regions which legally restrict the
announcement, issuance or distribution of this Press Release. In
such case, you are requested to take notice of those restrictions
and comply with the laws and regulations of such nations or
regions. Even receipt by you of this Press Release shall not be
deemed as an offer to purchase, or a solicitation of an offer to
sell, the shares in connection with the Tender Offer, but shall be
deemed as the distribution of information for reference purposed
only. (Notice Regarding Registration on Form F-4) Panasonic
Corporation may file a registration statement on Form F-4 ("Form
F-4") with the SEC in connection with the proposed share exchange
between Panasonic Corporation and SANYO Electric Co., Ltd. (the
"SANYO Share Exchange") and between Panasonic Corporation and
Panasonic Electric Works Co., Ltd. (the "PEW Share Exchange"). The
Form F-4 for the SANYO Share Exchange and/or the PEW Share Exchange
(if filed) will contain a prospectus and other documents. If a Form
F-4 is filed and declared effective, the prospectus contained in
the Form F-4 will be mailed to U.S. shareholders of the subject
company (SANYO Electric Co., Ltd. or Panasonic Electric Works Co.,
Ltd.) prior to the shareholders' meeting at which the relevant
proposed share exchange will be voted upon. The Form F-4 and
prospectus (if the Form F-4 is filed) will contain important
information about the subject company and Panasonic Corporation,
the relevant share exchange and related matters. U.S. shareholders
of the subject company are urged to read the Form F-4, the
prospectus and other documents that may be filed with the SEC in
connection with the relevant share exchange carefully before they
make any decision at the shareholders' meeting with respect to the
share exchange. Any documents filed with the SEC in connection with
the proposed share exchange will be made available when filed, free
of charge, on the SEC's web site at www.sec.gov. In addition, upon
request, the documents can be distributed for free of charge. To
make a request, please refer to the following contact information.
1006, Oaza Kadoma Kadoma City, Osaka 571-8501 Japan
Panasonic Corporation Corporate Finance & IR Group Masahito
Yamamura Telephone: 81-6-6908-1121
yamamura.masahito@jp.panasonic.com http://panasonic.net/
Disclaimer Regarding
Forward-Looking Statements
This press release includes forward-looking statements (within
the meaning of Section 27A of the U.S. Securities Act of 1933 and
Section 21E of the U.S. Securities Exchange Act of 1934) about
Panasonic and its Group companies (the Panasonic Group). To the
extent that statements in this press release do not relate to
historical or current facts, they constitute forward-looking
statements. These forward-looking statements are based on the
current assumptions and beliefs of the Panasonic Group in light of
the information currently available to it, and involve known and
unknown risks, uncertainties and other factors. Such risks,
uncertainties and other factors may cause the Panasonic Group's
actual results, performance, achievements or financial position to
be materially different from any future results, performance,
achievements or financial position expressed or implied by these
forward-looking statements. Panasonic undertakes no obligation to
publicly update any forward-looking statements after the date of
this press release. Investors are advised to consult any further
disclosures by Panasonic in its subsequent filings with the U.S.
Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934 and its other filings.The risks, uncertainties
and other factors referred to above include, but are not limited
to, economic conditions, particularly consumer spending and
corporate capital expenditures in the United States, Europe, Japan,
China and other Asian countries; volatility in demand for
electronic equipment and components from business and industrial
customers, as well as consumers in many product and geographical
markets; currency rate fluctuations, notably between the yen, the
U.S. dollar, the euro, the Chinese yuan, Asian currencies and other
currencies in which the Panasonic Group operates businesses, or in
which assets and liabilities of the Panasonic Group are
denominated; the possibility of the Panasonic Group incurring
additional costs of raising funds, because of changes in the fund
raising environment; the ability of the Panasonic Group to respond
to rapid technological changes and changing consumer preferences
with timely and cost-effective introductions of new products in
markets that are highly competitive in terms of both price and
technology; the possibility of not achieving expected results on
the alliances or mergers and acquisitions including the acquisition
of all shares of Panasonic Electric Works Co., Ltd. and SANYO
Electric Co., Ltd. through tender offers and share exchanges; the
ability of the Panasonic Group to achieve its business objectives
through joint ventures and other collaborative agreements with
other companies; the ability of the Panasonic Group to maintain
competitive strength in many product and geographical areas; the
possibility of incurring expenses resulting from any defects in
products or services of the Panasonic Group; the possibility that
the Panasonic Group may face intellectual property infringement
claims by third parties; current and potential, direct and indirect
restrictions imposed by other countries over trade, manufacturing,
labor and operations; fluctuations in market prices of securities
and other assets in which the Panasonic Group has holdings or
changes in valuation of long-lived assets, including property,
plant and equipment and goodwill, deferred tax assets and uncertain
tax positions; future changes or revisions to accounting policies
or accounting rules; as well as natural disasters including
earthquakes, prevalence of infectious diseases throughout the world
and other events that may negatively impact business activities of
the Panasonic Group. The factors listed above are not all-inclusive
and further information is contained in Panasonic's latest annual
report on Form 20-F, which is on file with the U.S. Securities and
Exchange Commission.
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