July 27 (Bloomberg) -- Hitachi Maxell Ltd., Hitachi Systems & Services Ltd. and three affiliates were poised to surge in Tokyo trading on a newspaper report that they may be bought out by parent Hitachi Ltd. for about 300 billion yen ($3.2 billion).

Hitachi Plant Technologies Ltd., Hitachi Software Engineering Co. and Hitachi Information Systems Ltd. were also set to gain by their daily limits after an excess of buy orders. Masahiro Takahashi, a spokesman at the parent, declined to confirm or deny the Nikkei report and said Hitachi is constantly reviewing ways of maximizing savings and synergies.

The report indicates “concrete” signs that President Takashi Kawamura’s plans to reorganize Hitachi are under way, said Yoshiharu Izumi, a Tokyo-based analyst at JPMorgan Chase & Co. The company, which posted a record 787.3 billion yen loss last fiscal year, has said since January it plans to consolidate redundant operations and reduce its number of subsidiaries.

“The move would be a positive one because it shows the company is able to take drastic measures to change,” said JPMorgan’s Izumi. “Hitachi’s earnings would also benefit by bringing the subsidiaries into the fold.”

The acquisitions are set to begin late August and may be announced this week, the Nikkei reported, without saying where it got the information.

Share Suspension

Hitachi Ltd. rose 4.4 percent to 307 yen at 1:18 p.m. on the Tokyo Stock Exchange, the biggest gain since May 8. Shares of Hitachi and the five subsidiaries were temporarily suspended from trading this morning after the Nikkei report.

The Tokyo-based company in March paid 26.7 billion yen to consolidate Hitachi Koki Co. and Hitachi Kokusai Electric Inc. into the parent. Hitachi Mobile Co. and Hitachi Electronics Engineering Co. have also been de-listed after being turned wholly owned.

Previous acquisitions were aimed at bolstering the so- called social-innovation businesses that includes Hitachi’s consumer electronics, information-technology and infrastructure operations, Hitachi’s Takahashi said.

Hitachi in January said it plans to consolidate redundant operations and improve its capital structure by reducing the number of subsidiaries to 800 companies this fiscal year, compared with 943 as of March 31.

Diversified Producer

The maker of products ranging from nuclear reactors, household appliances to hard-disk drives in May forecast its net loss will narrow to 270 billion yen this fiscal year after a record loss. Still, Hitachi had 807.9 billion yen in cash and near equivalents as of the end of March, according to data compiled by Bloomberg.

Yusuke Uchida, a Tokyo-based analyst for Rating and Investment Information Inc., said he’s examining whether to cut his rating on Hitachi’s stock as the financial strain from purchases may overshadow the profit contributions from the units.

Net income at Hitachi Maxell, which makes audio tape, battery products and IC cards, will probably be 100 million yen this fiscal year, compared a 24.1 billion yen loss a year earlier, the company said in April. Hitachi Plant, which makes power plants and water-treatment facilities, will post a 1.7 billion yen profit, compared with a loss of 859 million yen a year earlier, it said in April.

Hitachi Information Systems, a supplier of data-processing services, computers and software, in April forecast profit will gain 15 percent to 6.49 billion yen in the year to March 2010. Computer systems makers Hitachi Systems & Service and Hitachi Software are forecasting net income to decline this fiscal year 13 percent and 14 percent respectively.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net.

Last Updated: July 27, 2009 00:38 EDT