Shares in Japan’s JSR untraded on surprise possible buyout

By Sam Nussey

TOKYO (Reuters) – Shares in Japan’s JSR Corp had been untraded with a glut of purchase orders early on Monday, after the semiconductor supplies maker mentioned it was contemplating a deal to be acquired by state-backed Japan Funding Corp (JIC).

JSR’s market capitalisation was 677 billion yen ($4.71 billion) at Friday’s market shut. JIC would spend about 1 trillion yen on the acquisition, the Nikkei newspaper reported, injecting 500 billion yen into a brand new firm to make the acquisition and borrowing 400 billion yen from Mizuho Financial institution.

International locations all over the world are shifting to tighten management over the availability of semiconductors, that are important to the functioning of the defence, digital and automotive industries, amid elevated tensions between China and the USA.

An acquisition by JIC, which is overseen by the highly effective commerce ministry, can be the most recent in a sequence of more and more muscular strikes by Japan to juice up its chip trade, which has misplaced world market share in current a long time.

“JIC is beginning right here. It will shock me fairly a bit if that’s the place they stopped,” Travis Lundy of Quiddity Advisors wrote in a notice on Smartkarma.

Whereas Japan has a protracted and combined file of intervening to save lots of floundering industrial gamers, a transfer to take non-public a worthwhile firm that has already undergone restructuring dangers criticism for potential overreach.

JSR is a high provider of photoresists, that are light-sensitive chemical compounds used to print patterns on wafers, to world chipmakers. It competes with corporations together with Tokyo Ohka Kogyo and Shin-Etsu Chemical.

JSR, which was arrange in 1957 as a government-backed producer of artificial rubber, reported a 20% bounce in gross sales to 408.9 billion yen within the 12 months ended March, whereas working revenue declined 33% to 29.4 billion yen.

Shares in JSR, which unusually for a Japanese firm has a foreign-born CEO, have gained 25% year-to-date. Activist investor ValueAct Capital is a serious shareholder and has an government on the board.

($1 = 143.6800 yen)

(This story has been refiled to repair a typographical error in paragraph 7)

(Reporting by Sam Nussey; Modifying by Jamie Freed)

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