Aug. 12 (Bloomberg) -- NEC Corp., Japan’s largest personal- computer maker, hired Morgan Stanley and Daiwa Securities SMBC Co. to sell as much as 200 billion yen ($2.1 billion) in stock and bonds, three people familiar with the plan said. NEC shares fell as much as 5.2 percent.

NEC, which last sold stock to the public in 2003, may offer new shares to Japanese and global investors as early as September, said the people, who asked not to be identified because they aren’t authorized to discuss the sale publicly. The Tokyo-based company is also considering selling securities such as subordinated debt, the people said.

NEC may be raising funds for an overseas acquisition because it lags behind rivals such as Fujitsu Ltd. in expanding outside Japan, Yoshiharu Izumi, a Tokyo-based analyst at JPMorgan Chase & Co., said. NEC needs a merger or acquisitions to boost its overseas business, President Kaoru Yano said Feb. 20 last year.

The shares dropped 4.4 percent to close at 329 yen on the Tokyo Stock Exchange, the biggest decline since July 17. Fujitsu Ltd., NEC’s domestic closest rival, lost 1.3 percent and Japan’s benchmark Nikkei 225 Stock Average slid 1.4 percent.

NEC is constantly considering various options and the company has steady cash flow, said Makoto Miyakawa, a spokesman at the company. Morgan Stanley spokeswoman Mika Watanabe in Tokyo declined to comment, as did Daiwa Securities spokesman Ryoji Fuchinoue.

Return to Profit

NEC, whose businesses include computer services and office equipment, expects to generate profit of 10 billion yen in the 12 months ending March 2010. It posted a loss of 296.7 billion yen last fiscal year.

The company in Oct. 2008 bought NetCracker Technology Corp., a closely held software maker based in Waltham, Massachusetts, for $300 million, its biggest acquisition in nine years at that time. NEC aims to raise its overseas sales ratio to 30 percent from 21.1 percent in as of June 30, Miyakawa at NEC said by phone today.

“The discussion on the merger of NEC Electronics with Renesas would need to be completed before NEC sells shares,” JPMorgan’s Izumi said.

NEC owns 70 percent of NEC Electronics Corp., the subsidiary that’s in talks to merge with Renesas Technology Corp. to create Japan’s largest chipmaker. NEC Electronics has posted four straight annual losses and said in May that it plans to slash capital spending 36 percent and reduce research and development outlays 18 percent this year.

Growth Engine

The company lacks “growth engines” and faces further risks that losses at its semiconductor unit will persist, according to Deutsche Bank AG. “The financing could help the company maintain its creditworthiness,” said Akihito Murata, an analyst at Deutsche Bank in Tokyo. “Investors want to know how the company plans to revive growth.”

To help spur revenue, the company last year agreed to build a rechargeable-battery factory with Nissan Motor Co. to meet demand from electric and gasoline-electric hybrid automobiles.

Terms of the offer may be adjusted depending on changes in the business environment and demand from investors, according to the people who asked not to be identified.

To contact the reporters on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.netYusuke Miyazawa in Tokyo at ymiyazawa3@bloomberg.net

Last Updated: August 12, 2009 02:42 EDT