Hitachi Koki Jumps as Parent Said to Consider Sale of Stake

  • Stake owned by Hitachi valued at about 50 billion yen
  • Hitachi says it’s considering options to strengthen businesses

Hitachi Koki Co. surged the most in more than seven years in Tokyo trading after Hitachi Ltd. was said to be exploring a sale of its stake in the maker of power tools.

The stock jumped 11 percent, its biggest advance since January 2009, and closed at 817 yen. Hitachi climbed 6.4 percent to 502.4 yen, the largest gain since February.

The stake in Hitachi Koki would be valued at about 50 billion yen ($486 million), said a person with direct knowledge of the matter, asking not to be identified as the deliberations are private. Several companies including Carlyle Group LP have expressed interest in Hitachi Koki, the person said. Hitachi group owns more than 40 percent of the unit, according to data compiled by Bloomberg.

Hitachi was also said to be considering a sale of its controlling stake in Hitachi Kokusai Electric Inc. that could ultimately lead to a takeover of the unit, people familiar with the matter said this week. Hitachi Kokusai, which produces equipment for semiconductor makers and wireless-network gear manufacturers, has drawn interest from potential bidders, the people said, asking not to be identified because the discussions are private.

Hitachi has set a deadline for stake sales of early 2017, the person said. Nothing has been decided, and the company may decide not to sell.

Various Measures

“We are always considering various measures to strengthen the company,” said Masayuki Takeuchi, a Tokyo-based spokesman for Hitachi, declining to comment further on plans for the units. Hitachi is considering various options to strengthen its businesses and hasn’t made any decision on the two group companies at present, the Tokyo-based company said separately in a statement Wednesday.

Hitachi Kokusai climbed 2.1 percent to 1,953 yen in Tokyo trading.

Hitachi, Japan’s second-largest manufacturer, is reviewing its portfolio amid a slowdown in demand from China as well as oil- and gas-producing countries, hit by low prices for crude. Chief Executive Officer Toshiaki Higashihara said in April that he plans to spin off non-core units while focusing on digital technology to help boost sales in its car parts, train and energy businesses. Hitachi owns just over 50 percent of Hitachi Kokusai.

Hitachi is seeking more than 100 billion yen from asset sales, including Hitachi Koki, the Nikkei newspaper reported earlier.

A representative for Carlyle Group declined to comment on its possible interest in Hitachi Koki, while a representative for the Japanese company didn’t respond to a request for comment outside regular business hours.

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