Written by Kantaro Komiya and Rocky Swift
TOKYO (Reuters) – Japanese manufacturing giant Nidec said on Friday it plans to launch a 257 billion yen ($1.6 billion) bid for Makino Milling Machine, an unsolicited surprise takeover bid in a country known for cut-throat deals.
Nidec said the target company's board of directors had not approved the offer of 11,000 yen per share, a 42% premium to the stock's closing price on Thursday, as Nidec had not proposed the offer to Makino before the announcement.
Nidec, the world's largest manufacturer of precision motors, said it plans to finalize regulatory processes by early April and launch the tender offer on April 4, even without Makino's approval. A Makino spokesman declined to comment.
Makino shares were not traded amid a glut of buy orders, while Nidec shares rose as much as 5.3%.
“The deal looks like a rare win-win,” said Mike Allen, director of equity research at Tokyo-based Azabu Research. “Makino's price-to-book ratio is very low but its ROE is always less than 6%, so they need to create synergies. Nidec is also very cheap.”
“Insiders' control over Makino is very low, so this could easily work,” he added.
Kyoto-based Nidec, led by its founder Shigenobu Nagamori, has backed Japanese guidelines issued last year to encourage more mergers and acquisitions and remove the long-standing stigma around unsolicited bids.
Nidec last year acquired Takisawa Machine Tool after submitting an unsolicited 16.6 billion yen takeover bid. Nagamori told the newspaper this month that Nidec was looking for a buyout worth up to 1 trillion yen and was eyeing three potential targets in Europe and the United States.
Makino will be Nidec's largest acquisition to date, according to LSEG data, surpassing its $1.2 billion acquisition of France-based automaker Leroy-Somer in 2016.
($1 = 157.7400 yen)
