--Shares of Renesas Electronics bid-only at Y336 Monday
morning
--Buy orders flood in after report that government-backed fund
is looking to counter $1.3 billion bid from KKR
--Fund looking to put together Japanese consortium of blue chips
to make bid
--Renesas releases statement saying nothing has been decided
TOKYO--Shares of Renesas Electronics Corp. (6723.TO) faced a
flood of buy orders early Monday as investors welcomed weekend news
that a government-backed fund is looking to put together a
consortium of Japanese blue chips to counter a $1.3 billion bid
from U.S. private equity firm KKR & Co. L.P. (KKR).
The stock was bid-only with an indicative price of Y336 on the
Tokyo Stock Exchange at GMT 0130, representing the maximum allowed
daily rise under TSE trading rules and 31% higher than Friday's
close. The Nikkei Stock Average was down 0.8%.
A Japanese government official said Saturday that Innovation
Network Corp. of Japan was in discussions with a group of leading
Japanese manufacturers to consider making the bid. The official
didn't disclose which companies might join the bid, but a report in
the Nikkei said the consortium would include some of Japan's
largest auto and electronics companies, including Toyota Motor
Corp. (7203.TO) and Panasonic Corp. (6752.TO).
Spokespeople at both Toyota and Panasonic declined to comment
Monday. In a statement, Renesas said the reports of the investment
were not based on information the company has released, adding that
no decisions had been made.
"These developments will ease financing concerns (at the firm),"
said Kenichi Hirano, a market analyst at Tachibana Securities. But
he added that restructuring measures expected down the road will
determine whether the shares continue to rise.
People familiar with the matter said in August that while KKR
had approached Renesas and its shareholders with an investment
offer, the talks were still at an early stage and might not lead to
a KKR investment. If the deal were to materialize, it would be
KKR's biggest investment in a Japanese company since the
private-equity firm opened its Tokyo branch in 2006.
The offer from the New York fund run by Henry Kravis and George
Roberts sparked concerns that they may cut off the chip-maker's
less-profitable operations, some of which may be critical for end
users in Japan.
Renesas, the world's largest maker of automotive microcontroller
chips, was created through a 2010 merger between NEC Electronics
and Renesas Technology.
Among Renesas's three major shareholders, NEC Corp. (6701.TO) is
up 1.7% at Y121, Hitachi Ltd. (6501.TO) is down 0.9% at Y457 and
Mitsubishi Electric Corp. (6503.TO) is down 2.2% at Y637.
-Kosaku Narioka contributed to this article.
Write to Kana Inagaki at kana.inagaki@dowjones.com
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