(Bloomberg) -- Apollo Global Management Inc. and Bain Capital are among potential bidders for Fujitsu Ltd.’s controlling stake in Shinko Electric Industries Co., a packaging material maker for semiconductors, according to people familiar with the matter.
Dai Nippon Printing Co., Japan Investment Corp. and KKR & Co. have also expressed interest in Fujitsu’s 50% stake in Shinko Electric, said the people, who asked not to be identified as the information is private. The stake is valued at around $2.7 billion based on the latest stock price of Shinko Electric.
Fujitsu has been working with an adviser as it weighs options for its shares in the Tokyo-listed firm and looks to streamline its operations, the people said. Potential suitors could be more cautious in determining a valuation for Shinko Electric as its business involves national security issues, according to the people.
Shares of Shinko Electric jumped as much as 14% and touched the highest level since April 2022 after the Bloomberg News report. The stock has risen 66% this year, giving the company a valuation of about $5.4 billion. Fujitsu extended gains to as much as 9.5%, the biggest advance in more than a year.
Deliberations are ongoing and the potential bidders may not proceed with formal offers, the people said. Fujitsu could also decide to keep its stake for longer, they added. A spokesman for Fujitsu said it’s true that the company is considering various ways to maximize the value of the individual company but nothing has been decided at this point. Representatives for Apollo, Bain, DNP, JIC, KKR and Shinko Electric declined to comment.
Fujitsu, which in its heyday made everything from laptops and supercomputers to chips, mobile phones and home appliances, has been looking to focus on communications and information technology systems for businesses. The company’s attempt to sell its majority stake in air-conditioner maker Fujitsu General Ltd. has stalled, Bloomberg News reported last month. Bidders had been unable to agree on a price with the Japanese firm, people familiar with the matter have said.
Founded in 1946 as a business that recycled household light bulbs, Shinko Electric develops and produces semiconductor packages for electric vehicles, home appliances and industrial equipment, according to its website. It had almost 5,600 employees as of the end of March and overseas markets account for about 90% of its sales.
Talks about selling Fujitsu’s stake in Shinko Electric have been engulfed in “more active discussions on economic security involving closer communication with stakeholders,” including the Japanese government, Fujitsu Chief Executive Officer Takahito Tokita said in an interview in December. In-depth discussions were necessary, not only based on economic rationality, but also economic security, he added.
--With assistance from Yuki Furukawa.
(Updates Shinko Electric’s shares in fourth paragraph.)
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