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TOKYO (Reuters) – Japan’s Toshiba Corp said on Friday it had completed the $ 18 billion sale of its chip unit to a consortium led by U.S. private equity firm Bain Capital.
The completion of the deal, initially aimed for by end-March, had been delayed due to a prolonged review by Chinese antitrust authorities. China approved the deal last month.
The Bain consortium last year won a long and highly contentious battle for Toshiba Memory, the world’s No. 2 producer of NAND chips. Toshiba put the business up for sale after billions of dollars in cost overruns at its Westinghouse nuclear unit had plunged it into crisis.
The consortium includes South Korean chipmaker SK Hynix, Apple Inc, Dell Technologies, Seagate Technology and Kingston Technology.
Under the deal with Bain, Toshiba repurchased 40 percent of the unit, it said in a statement.
Reporting by Makiko Yamazaki; Editing by Sunil Nair
TAIPEI/SHANGHAI (Reuters) – Foxconn Industrial Internet (601138.SS), a subsidiary of the world’s largest contract manufacturer Foxconn (2317.TW), announced plans to raise up to 27.1 billion yuan ($ 4.26 billion) in what will be mainland China’s biggest IPO in almost three years.
The Foxconn unit, which is known as FII and makes electronic devices, cloud service equipment and industrial robots, is offering up to 1.97 billion shares at 13.77 yuan per share in Shanghai, according to a statement it filed to the stock exchange late on Tuesday.
With 10 percent of its enlarged capital offered in the initial public offering (IPO), Shenzhen-based FII would have a valuation of about $ 43 billion at listing. Bookbuilding for the IPO is on May 24.
The listing is widely seen as a step for Terry Gou’s Foxconn, a major Apple Inc (AAPL.O) supplier formally known as Hon Hai Precision Industry Co (2317.TW), to wean itself off heavy reliance on manufacturing smartphones for the California-based iPhone maker and to diversify into new areas.
Foxconn has signaled previously that FII will launch projects in areas including smart manufacturing, industrial internet, cloud computing, and fifth-generation wireless technologies.
The IPO is also a reflection of Beijing’s seriousness in luring tech giants onto mainland exchanges.
At about $ 43 billion, the unit’s valuation would not be far behind parent company Foxconn’s market capitalization of about $ 49 billion.
The IPO’s pricing represents 17 times FII’s historical earnings, well below the valuation cap of 23 times favored by Chinese regulators.
FII plans to sell 30 percent of its public share offering to a group of strategic investors in a rare move for mainland deals.
The strategic investors are not being called cornerstones – investors who accept a lock-up period in return for large allocation, which is a practice common in other Asian markets such as Hong Kong to bolster demand for large deals.
However, the group will function as such, with its investments tied up for between one and three years. In an additional unusual move, 70 percent of institutional investors’ allocated shares will also be locked up for 12 months.
FII’s IPO ranks as the fourth largest in the mainland over the past 10 years, outpaced only by China State Construction Engineering (601668.SS), which raised $ 7.3 billion in 2009; China Railway Construction (601186.SS), which sold shares worth $ 5.7 billion in 2008; and Guotai Junan Securities (601211.SS), which raised $ 4.8 billion in 2015.
Reporting by Jess Macy Yu in Taipei and Julie Zhu and Jennifer Hughes in Hong Kong; Additional reporting by Engen Tham and Yiming Shen in Shanghai; Editing by Muralikumar Anantharaman
TOKYO (Reuters) – Japan’s Toshiba Corp has decided it will cancel the planned $ 18.6 billion sale of its memory chip unit if it does not get approval from China’s anti-monopoly regulator by May, the Mainichi newspaper said on Sunday.
A consortium led by U.S. private equity firm Bain Capital last year won a long and highly contentious battle for the unit, which Toshiba put up for sale after billions of dollars in cost overruns at its Westinghouse nuclear unit plunged it into crisis.
But Toshiba was unable to complete the sale by the agreed deadline of March 31 as it was still waiting for approval from China’s antitrust authorities.
Toshiba raised $ 5.4 billion from a share issue to foreign investors late last year and it had now decided it did not need to go through with the sale, the Mainichi newspaper reported. It did not cite any source.
“Toshiba has come to a decision that there is little necessity for the sale as it is no longer in insolvency,” the newspaper reported, adding that Toshiba would consider listing the unit if the sale did not go ahead.
A Toshiba spokesman said the company was still aiming to complete the sale as soon as possible.
In early April, Toshiba Chief Executive Nobuaki Kurumatani said his company would not use the option of cancelling the sale unless there was any “major material change” in circumstances.
Reporting by Makiko Yamazaki, Kiyoshi Takenaka; Editing by Robert Birsel
TOKYO (Reuters) – A Hong Kong-based activist investment fund opposed to Toshiba Corp’s (6502.T) sale of its chip unit to a Bain Capital-led group said the deal should be renegotiated at a valuation of 3.3 trillion yen to 4.4 trillion yen ($ 30 billion-$ 41 billion).
Argyle Street Management said on Friday that the current deal, which values the unit at 2 trillion yen, was agreed upon when Toshiba was desperate for cash. Toshiba is no longer insolvent, and was free to terminate the deal without incurring any penalty because the sale had not closed by a March 31 deadline, it said.
Toshiba should aim to list the unit if the Bain group will not agree to a higher price, it added.
Reporting by Makiko Yamazaki; Writing by Ritsuko Ando; Editing by Edwina Gibbs
[unable to retrieve full-text content]LOS ANGELES (Reuters) – Walt Disney Co said on Wednesday it had created a new unit for its streaming video and international businesses as the company retools its traditional media operation for a world rapidly embracing online video.
SHANGHAI/BEIJING (Reuters) – Chinese internet search firm Baidu Inc posted a forecast-beating quarterly revenue increase and unveiled a U.S. listing plan for its Netflix-like video platform iQiyi as it looks to rev up new drivers for growth.
Baidu posted on Tuesday fourth quarter revenue of 23.6 billion yuan ($ 3.72 billion), up 29 percent against the same period a year ago and topping analysts’ forecasts of 23.05 billion yuan and the company’s own guidance.
The strong results are a major fillip for Baidu as it looks to ramp up spending on riskier gambles in autonomous driving and fend off cashed-up rivals such as Tencent Holdings Ltd and Alibaba Group Holding Ltd in online video content.
A U.S. listing would bring extra financial muscle for its popular iQiyi platform as it ramps up spending. Baidu said the size of any IPO was not yet set, but that it would likely remain iQiyi’s controlling shareholder. iQiyi could be worth $ 8 billion or more, according to Reuters Breakingviews.
“An IPO will bolster iQiyi’s position in the market and give it more cash to buy content or make content on their own,” said Ni Shuang, Beijing-based Pacific Securities analyst, adding it would help Baidu keep pace with rivals in the space.
The strong quarterly showing – driven by the core search and news feed businesses – is also key to generating cash flow “to fund our new AI businesses”, Baidu chief executive Robin Li told a post-earnings conference call.
The company’s shares rose nearly 5 percent in extended trading after the results, overturning a nearly 4 percent fall since the start of the year.
Herman Yu, the firm’s chief financial officer, said content costs rose 70 percent last year to 13.4 bln yuan as iQiyi acquired content. These costs would rise at a similar pace this year.
The firm will also raise R&D spending in areas like its Apollo open-source software platform for autonomous driving, which executives said would eventually become a “very material and significant revenue source for the company”.
“Having said that, a key caveat is that this market will take time to build,” chief operating officer Qi Lu told the conference call.
Strong results in its more traditional businesses were central to Baidu’s success, with revenue from its core online marketing – including its search platform and news feed – jumping 26.3 percent to 20.4 billion yuan.
The results will help soothe Baidu investors as the company looks to turn around its fortunes after a series of missteps sparked steep losses in 2016 and hit its advertising revenue from internet searches.
Baidu, part of China’s trinity of tech giants along with Alibaba and Tencent, posted net income of 4.16 billion yuan in the quarter ended Dec. 31, up from 4.13 billion yuan a year earlier.
Excluding one-time items, the company earned 14.9 yuan per ADS, above forecasts.
Baidu pegged its guidance for first-quarter revenue growth, between 19.86 billion yuan and 20.97 billion yuan, a 25-32 percent increase against the same period of 2017. That compared with analysts’ average estimate of 21.18 billion yuan.
Reporting by Adam Jourdan in SHANGHAI, Pei Li in BEIJING and Arjun Panchadar in BENGALURU; Editing by Eric Meijer and Muralikumar Anantharaman
(Reuters) – Japan’s Fujitsu Ltd said on Friday it was in talks about selling its mobile phone business to investment fund Polaris Capital Group, becoming the latest Japanese electronics maker to withdraw from the sector.
The sale, if realized, would leave just three Japanese electronics makers – Sony Corp, Sharp Corp and Kyocera Corp – in a global market dominated by Apple Inc, Samsung Electronic Co Ltd and cheaper Chinese rivals.
The potential deal calls for Tokyo-based Polaris Capital to take a majority stake in Fujitsu’s mobile phone unit, which is valued at around 40 billion yen to 50 billion yen ($ 365 million to $ 456 million), a source familiar with the situation said.
The size of the stake is still under negotiation, said the person, who asked not to be identified as the discussions were confidential.
An official agreement is expected by the end of the month, the Nikkei newspaper said.
Polaris will aim to list the business in several years, the Yomiuri newspaper reported.
Fujitsu said in a statement that no decision has been made and a representative declined to comment on how large a stake is being negotiated.
Around the year 2000, there were more than 10 major Japanese handset firms producing traditional flip phones, including NEC Corp and Toshiba Corp.
But most have since withdrawn from the business, caught out by the meteoric rise of Apple and Samsung.
Domestic makers failed to gain a global presence by being overly reliant on the lucrative domestic market, which gave them little incentive to change their Japan-specific mobile phone formats and expand overseas.
The rise of low-cost component producers such as Taiwan’s MediaTek Inc also have made it easier for price-competitive Chinese rivals to enter the market.
Fujitsu, whose shares were up 1.0 percent in a flat broader market, has been unloading other non-core businesses as well.
Last year, Lenovo Group agreed to buy a majority stake in Fujitsu’s personal computer unit for up to $ 269 million in a bid to capture a larger share of a market that is battling weak sales as more people switch to mobile devices.
The Nikkei added that retaining the mobile division’s staff and factories will likely be a condition of the deal. Fujitsu, which wants to focus on its core information technology services business, is also expected to continue operating its Arrows brand under Polaris, the source said.
Fujitsu, which spun off its mobile phone operations into a separate company in 2016, had drawn interest from other investment funds such as Britain’s CVC Capital Partners Ltd and Chinese personal computer maker Lenovo Group Ltd, the Nikkei reported last year.
Reporting by Minami Funakoshi and Junko Fujita in Tokyo, writing by Makiko Yamazaki in Tokyo, with additional reporting by Rushil Dutta in Bengaluru; Editing by Shri Navaratnam and Malcolm Foster
TOKYO (Reuters) – SoftBank Group Corp (9984.T) said on Monday it was considering listing its Japanese wireless business, seeking to raise a reported $ 18 billion in a move that would accelerate the conglomerate’s transformation into one of the world’s biggest tech investors.
A spin-off – potentially the biggest IPO by a Japanese company in nearly two decades – would also give the unit more autonomy as well as help investors with valuing the business and its parent.
SoftBank Group, which saw its shares climb 4 percent on the news, has a vast range of holdings including stakes in British chip designer ARM Holdings ARM.L, struggling U.S. wireless service provider Sprint Corp (S.N) as well as Alibaba Group Holding Ltd (BABA.N).
It has with other investors also set up a $ 93 billion Vision Fund, that is investing in range of firms to capitalize on a tech future expected to be driven by artificial intelligence, robotics and interconnected devices.
SoftBank Group plans to sell some 30 percent of SoftBank Corp, raising around 2 trillion yen ($ 18 billion) that would go towards investments in growth, such as buying into foreign information-technology companies, the Nikkei newspaper said without citing sources.
It plans to seek approval from the Tokyo Stock Exchange as early as spring and aims to debut in Tokyo as well as overseas, possibly London, around autumn, the business daily said.
SoftBank Group said in a statement that a listing of the business was one option for its capital strategy but that no such decision had been made.
A 2 trillion yen ($ 18 billion) IPO would be one of the biggest listings by a Japanese company, rivaling the 2.2 trillion yen 1986 offering of Nippon Telegraph and Telephone Corp (9432.T) as well as a 2.1 trillion yen listing by NTT DoCoMo Inc (9437.T) a decade later.
“It makes sense to spin off the mobile-phone business using a public offering that would leave SoftBank in control and provide SoftBank with more cash to pursue its strategy of investing in companies with potentially high growth prospects,” Erik Gordon, a professor at the University of Michigan’s Ross School of Business.
“It is a way of obtaining capital without adding debt or diluting SoftBank’s equity interests in the growth companies.”
The domestic telecoms unit, Japan’s No. 3 wireless carrier, posted a 4.5 percent rise in operating profit to 720 billion yen in the year ended March on sales of 3.2 trillion yen.
SoftBank Group’s complicated structure and constant stream of new investments have left many investors struggling to value the company with analysts often noting that its market value does not accurately reflect the value of its massive holdings.
SoftBank’s market value currently stands at around $ 92 billion. By contrast, its near 30 percent stake in Alibaba is worth around $ 140 billion.
Large companies seeking to list in Tokyo are required to float at least 35 percent of their shares although these rules can be eased when the company is also listing overseas.
Reporting by Yoshiyasu Shida and Sam Nussey; Additional reporting by Chris Gallagher and Minami Funakoshi; Writing by William Mallard; Editing by Edwina Gibbs
HELSINKI (Reuters) – Nokia is still reviewing its options for its undersea cables unit, a business that underpins the global Internet, chief executive Rajeev Suri said on Thursday.
Reuters reported in May that Nokia was planning to sell the ASN division, which is one of the top suppliers of undersea cable networks in the world and is valued at 800 million euros ($ 944 million).
“We are still in the middle of our strategic review which we have set for ASN, so there’s no update,” Suri told a conference call.
Some analysts had expected a decision on the unit alongside the release of Nokia’s interim report released on Thursday.
The unit was bought by Nokia last year as part of its 15.6 billion-euro ($ 17 billion) acquisition of Franco-American rival Alcatel-Lucent.
($ 1 = 0.8471 euros)
Reporting by Jussi Rosendahl, editing by Terje Solsvik
Demand for those products could grow in the coming years as cloud computing services become more widespread and need faster connectors to link …