Goldman Sachs exits talks with Panasonic on Sanyo

TOKYO: Goldman Sachs said Wednesday it had pulled out of talks with Panasonic Corp. about selling its stake in Sanyo Electric Co. because the Japanese technology giant's offer was too low.

"We are no longer in talks with Panasonic over Sanyo," said Hiroko Matsumoto, a spokeswoman for the Wall Street bank.
Panasonic said earlier this month it aimed to acquire Sanyo, a deal that would have created Japan's biggest electronics maker and give Panasonic a bigger share of the fast-growing market for rechargeable and solar batteries.

But Matsumoto said Panasonic's offer of 120 yen (1.26 dollars) per Sanyo share was too low. Sanyo shares closed down 3.85 percent at 150 yen Wednesday.

Sanyo, which started out making bicycle lamps after World War II, issued several billion dollars worth of stock to Goldman Sachs, Daiwa Securities SMBC Co. and Sumitomo Mitsui Banking Corp. in 2006 to shore up its capital base.

Together they hold the equivalent of a 70 percent stake.

Daiwa Securities SMBC for its part said Panasonic's offer was too low even to start negotiations.

"The company believes Panasonic's offer for the Sanyo shares is priced too low and does not accurately reflect the company's value," said Daiwa Securities spokesman Kenichi Kanda.

A takeover of Sanyo by Panasonic would mark the first major shake-up of Japan's consumer electronics industry in response to the current downturn triggered by the global financial crisis and a stronger yen.

Sanyo reported its first annual net profit in four years in May after drastic streamlining.

But its fortunes have taken a turn for the worse since then and the Osaka-based company said this month its profits plunged by two-thirds in the fiscal second quarter due to a stronger yen and sluggish sales.