SHINKO ELECTRIC INDUSTRIES CO., LTD.
SHINKO ELECTRIC INDUSTRIES CO., LTD.
While the Company was deliberating various management strategies to enhance its corporate value, the Company began to have discussions with Fujitsu Limited (“Fujitsu”) in response to Fujitsu’s plan to sell its Company Shares. The Company carefully deliberated various options, including maintaining its listing, and came to conclude that, by conducting the Tender Offer etc. for privatization with a Tender Offeror that is focused on JIC Capital, Ltd. (“JICC”) as a government-affiliated fund, which basically supports the Company’s business policy of focusing on capital investment and technological development in growth markets, the Company will be able to promote initiatives that contribute to enhancing corporate value from a medium- to long-term perspective, without being swayed by short-term fluctuations in business performance, as a partner for the Company to aim “Progress without Limits,” and since the Company is planning to execute the Tender Offer etc. with JICC as a partner, the Company will be able to make decisions more quickly than before, and promote measures such as the expansion of human capital, which is fundamental to the promotion of the Company’s business, which will contribute to future enhancement of corporate value.
The Company came to conclude that, by conducting the Transactions with a Tender Offeror that is focused on JIC Capital, Ltd. as a government-affiliated fund, which basically supports the Company’s business policy of focusing on capital investment and technological development in growth markets, the Company will be able to promote initiatives that contribute to enhancing corporate value from a medium- to long-term perspective without being swayed by short-term fluctuations in business performance, as a partner with whom the Company can aim for “Progress without Limits,” and since the Company is planning to execute the Tender Offer, etc. with JIC Capital, Ltd. as a partner the Company will be able to make decisions more quickly than before and promote measures such as the expansion of human capital, which is fundamental to the promotion of the Company’s business, which will contribute to the future enhancement of corporate value.
The Company also believes that the superb, unique technologies of Dai Nippon Printing Co., Ltd. and Mitsui Chemicals, Inc., combined with the Company’s semiconductor packaging technologies, will contribute to the enhancement of the Company’s medium- to long-term corporate value.
While the Company was deliberating various management strategies to enhance its corporate value, in September 2021, the Company began to have discussions with Fujitsu Limited in response to Fujitsu Limited’s plan to sell its Company shares.
The Company then carefully deliberated various options, including maintaining its listed status, and reached the decision that it would be desirable to implement a bidding procedure.
The Company commenced the primary bidding process in late March 2023, received letters of intent from multiple candidates in late May of the same year, and then selected candidates to participate in the secondary bidding process. After that, the secondary bidding process started in late June of the same year. After due diligence, the Company and Fujitsu Limited received a written non-legally binding proposal from JIC Capital, Ltd. in September of the same year, a written non-legally binding final proposal from another candidate in late October of the same year, and a written legally binding final proposal from JIC Capital, Ltd. in November of the same year. Since no legally binding final proposal was submitted by the other candidates, the Company and Fujitsu Limited comprehensively reviewed the proposals of each candidate, and as a result, later in the same month, the Company and Fujitsu Limited decided to select JIC Capital, Ltd. as the final candidate from among JIC Capital, Ltd. and the other candidates, with the transaction price, transaction certainty, and transaction speed as the main decision-making criteria.
The Company and Fujitsu Limited repeatedly engaged in continual discussions and negotiations regarding the content of the final proposal, the tender offer price, and the repurchase price, and as a result, on December 12 of the same year, JIC Capital, Ltd. made a proposal to set the tender offer price at 5,920 yen per Company Share and the repurchase price at 4,218.1 yen per Company Share. On the same day, the Company and Fujitsu Limited responded and agreed to JIC Capital, Ltd. ’s proposal.
Furthermore, for such consideration, the Company has implemented measures to ensure their fairness, including: implementation of bidding procedure, procurement by Company of the written report from independent special committee, procurement of advice to company from independent legal and financial advisors, procurement by Company of share valuation report from third-party valuation organization, unanimous approval of all non-interested directors of the Company, and measures to ensure opportunities for purchase for parties other than Tender Offeror.
For the following reasons, the Company determined that the Tender Offer provides the Company’s shareholders with a reasonable opportunity to sell shares:
(a) The assessed value of the share value and the tender offer price presented by JIC Capital, Ltd. was the only proposal presented as a legally binding proposal and the tender offer price was 5,920 yen.
(b) Among the results of the Company Shares calculated by Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., a financial adviser and third-party valuation organization of the Company, the tender offer price is above the upper end of the range of calculation results using market share price analysis and the mid-point of the range calculated by the comparable companies analysis, and close to the median of the range of the results of the calculation based on the Discounted Cash Flow analysis.
(c) The tender offer price includes: a premium of 18.88% on the closing price of the Company Shares as of May 31, 2023, which is the business day immediately preceding June 1, 2023, the date on which the speculative media report on the Transactions that triggered a fluctuation in the Company Shares were published; a premium of 31.00% on the simple average closing price for the past one month; a premium of 44.60% on the simple average closing price for the past three months; and a premium of 51.87% on the simple average closing price for the past six months, respectively. Under the circumstances where it is not unreasonable to assume that the share price before the publication of the speculative media report and the subsequent multiple speculative media reports had a considerable impact on the expected value of the Transaction, etc., it is not unreasonable to assume that the premium is sufficiently reasonable in comparison with the level of premiums in cases of takeover bids for listed companies aiming to go private after June 28, 2019.
(d) The measures to ensure fairness of the Tender Offer have been taken, and therefore the interests of general shareholders have been taken into consideration.
In response to Fujitsu Limited’s plan to sell its Company Shares, the Company deliberated various options including maintaining its listed status. As a result, the Company has ultimately decided that carrying out the Transactions is the best option from the perspective of maximizing the interests of its shareholders and the continued enhancement of corporate value.
JIC Capital Ltd.’s basic policy is to re-list the Company Shares after business growth and enhancement of corporate value are realized for the Company through the Transactions.
According to the Tender Offeror, the Tender Offer is expected to commence on the date on which the following conditions precedent are satisfied:
(i)The Company’s special committee reports to the board of directors of the Company that it is appropriate for the board of directors of the Company to express its opinion in favor of the Transactions and to recommend that the shareholders of the Company tender their shares in the Tender Offer, and the report has not been changed or withdrawn;
(ii) The board of directors of the Company expresses its opinion in favor of the Transactions, recommends that shareholders of the Company tender their shares in the Tender Offer, and the opinion has not been changed or withdrawn;
(iii) No judgment has been made or is likely to be made by any judicial or administrative agency that restricts or prohibits the Transactions;
(iv) Fujitsu Limited has performed and complied with, in all material respects, all of its obligations under the master transaction agreement (the “Master Transaction Agreement”) between the Tender Offeror and Fujitsu Limited, and there has been no breach of Fujitsu Limited’s representations and warranties under the Master Transaction Agreement that would have a material adverse effect;
(v) The acquisition of permits and authorizations, etc. under domestic and foreign competition laws and regulations, etc. has been completed;
(vi) Confirmation has been obtained in writing from the Company that there is no material fact regarding the business, etc.;
(vii) No settlement failure event has occurred with regard to the lender in the borrowings for the purpose of financing the Transactions;
(viii) The “Memorandum of Understanding Regarding Tender Offer” between the Tender Offeror and the Company remains in effect, and the Company has performed and complied with all of its obligations;
(ix) No circumstances have arisen in the Company that would allow the withdrawal of the Tender Offer; and
(x) No proposal for a dividend of surplus to be implemented on or after the execution date of the Master Transaction Agreement has been approved at any shareholders’ meeting of the Company.
If any counter proposal is made before the commencement of the Tender Offer, the Tender Offeror shall not bear an obligation to commence the Tender Offer unless:
・Fujitsu Limited covenants not to accept the counter proposal; or
・The Tender Offeror changes the tender offer price to an amount higher than the consideration proposed in the counter proposal and changes the repurchase price to an amount that, taking tax effects into account, is substantially higher than the consideration proposed in the counter proposal.
Please see the news release for details of the Master Transaction Agreement.
According to the Tender Offeror, the Tender Offeror has obtained all permits and authorizations, etc. under domestic and foreign competition laws and regulations with the completion of the procedures and steps necessary under the competition laws of China on December 27, 2024.
For details, please contact the Tender Offeror, JIC Capital, Ltd.
The reason for that is, according to the Tender Offeror, based on the assumption that no dividends would be paid based on the base date of March 31, 2024 and thereafter as well, the purchase price for the Tender Offer was determined on a comprehensive basis.
This is because there is the plan to conduct the Tender Offer for the Company Shares.
The Company is grateful to its shareholders for their ongoing support, and had the shareholder special benefit program in place with the intention to make investment in Company Shares more attractive and to have more shareholders hold Company Shares in the medium- to long-term.
However, because the Company is expected to be privatized through a series of procedures including the Tender Offer, it will no longer be possible for shareholders to hold Company Shares in the medium- to long- term. In addition, because the Company has expressed an opinion to support the Tender Offer and recommends that its shareholders tender their shares in the Tender Offer, the Company has decided to abolish the shareholder special benefit program.
Taking into account the status of discussions among the relevant parties regarding the time required for the procedures to commence the Tender Offer, the Tender Offeror plans to commence the Tender Offer around mid February, 2025.
For details, please contact the Tender Offeror, JIC Capital, Ltd.
The timeline of delisting has not yet been decided. If the Tender Offer is successfully completed, the Company Shares will be privatized, so the Company Shares will be delisted through the prescribed procedures. After delisting, the Company Shares will no longer be tradable on the Prime Market of the Tokyo Stock Exchange.
It is 5,920 yen per common share.
According to the Tender Offeror, because the procedures and steps required under domestic and foreign competition laws and foreign investment control laws and regulations will take time to complete, the Tender Offeror plans to commence the Tender Offer on the following date: a date the aforementioned procedures and steps are completed and other conditions precedent set out in the master transaction agreement of the transactions are satisfied. Therefore, the Tender Offeror made an announcement in the form of an advance notice of the Tender Offer before the commencement of the Tender Offer.
Shares can be traded as usual on the Prime Market of the Tokyo Stock Exchange.
The Tender Offeror will conduct the Tender Offer for all of the Company Shares (excluding the shares held by Fujitsu Limited and the treasury shares held by the Company).
If the Tender Offer has been successfully completed, but the Tender Offeror is unable to acquire all of the Company Shares in the Tender Offer, then the Tender Offeror intends to conduct the share consolidation, and after a series of subsequent procedures, will hold all of the issued shares of the Company, excluding the treasury shares held by the Company, by conducting the share repurchase to acquire all of the shares held by Fujitsu Limited.
Please see the news release for details.
According to the Tender Offeror, details of the tender procedure will be promptly announced as soon as it is decided.
Shareholders can tender their shares after the Tender Offer has commenced. The Company resolved at its Board of Directors meeting held on December 12, 2023 to express its opinion as of that date that, if commenced, it will express an opinion to support the Tender Offer and recommend that its shareholders tender their shares in the Tender Offer.
It also resolved that the Company will express its opinion again when the Tender Offer is commenced.
According to the Tender Offeror, it plans to appoint Mizuho Securities Co., Ltd. as the tender offer agent, and Mizuho Securities Co., Ltd. plans to appoint Rakuten Securities, Inc. as the subagent.
SHINKO ELECTRIC INDUSTRIES CO., LTD. was established in September 12, 1946.
We are principally engaged in the development, manufacturing and sales of semiconductor packages, which are indispensable for a variety of electronic products such as personal computers and mobile phones. See “Our Business” for details.
Our head office is in Oshimada-machi, Nagano city, Nagano prefecture, Japan. > Access
SHINKO listed on the Second Section of the Tokyo Stock Exchange in December 1984 and on the First Section in September 1996. Moreover, we moved to the Prime Market due to the restructuring of the Tokyo Stock Exchange market in April 2022.
Our stock code is 6967.
Under the basic idea of “Harmony between global environment and corporate activities,” SHINKO has positioned environmental issues as a management priority and has promoted various environmental preservation activities such as plant waste treatment measures, the reduction of chemical substance emissions, energy conservation and the development of green products. See “Initiatives for Environmental Issues” for details.
SHINKO has developed deep roots in communities and engage in social activities in harmony with these local communities. See “Social Contribution Activities” for details.
The latest sustainability report can be found at “Sustainability Report”.
SHINKO’s financial statements are announced every year as follows:
Accounts are closed as of March 31.
Annual financial statements for the year ended March 31 are announced at the end of April.
Financial statements for the first quarter are announced at the end of July.
Interim financial statements for the interim period are announced at the end of October.
Financial statements for the third quarter are announced at the end of January.
See “IR Calendar” for details.
Earnings release materials (Financial Results and Material, etc.) can be found at “IR Library”.
In addition, Business performance can be found at “Financial Highlights”.
One unit of a stock transaction is 100 shares.
See “Cash Dividend per Share”for the amounts of the cash dividend per share.
Ordinary general meeting of shareholders is held in late June every year. Please check the IR Calendar for accurate dates.
