NEC Corporation (TSE:6701) proposed to acquire 48.64% stake in NEC Networks & System Integration Corporation (TSE:1973) from the group of shareholders for approximately ¥240 billion on October 29, 2024. A cash consideration valued at ¥3250 per share will be paid by NEC Corporation. Upon completion, NEC Corporation will own 87.13% direct stake in NEC Networks & System Integration Corporation. The transaction will be financed through senior debt of ¥236 million. NEC plans to borrow funds from Sumitomo Mitsui Banking Corporation by the business day preceding the commencement date of settlement for the Tender Offer subject to the completion of the Tender Offer and the certain other conditions in order to cover the funds required for the Transactions.
The transaction is subject to consummation of due diligence investigation and minimum tender. NEC sets the minimum number of shares to be acquired in the Tender Offer at 22,756,305 shares, If the total number of the shares tendered in the Tender Offer is less than the minimum number of shares to be acquired, NEC will not acquire any of the Tendered Shares. The Board of Directors of NEC Networks & System Integration Corporation formed a special committee for the transaction. NESIC has resolved at the meeting of its board of directors to express its opinion supporting the Tender Offer and to recommend that the shareholders of NESIC tender their shares in the Tender Offer. The tender offer will be commenced on October 30, 2024, and will close on December 11, 2024. As of December 20, 2024, at the meeting of its board of directors, NEC Corporation decided to change the Tender Offer price from ¥3,250 yen to ¥3,300 and change the minimum number of shares to be acquired from 22,756,305 shares to 10,153,605 shares, and decided that the Tender Offer Price after such change will be the final price, that the Tender Offer Price will not be changed in any way in the future and NEC will not voluntarily extend the Tender Offer Period again unless required by the Act. Further, as it became necessary to file the amendment to the tender offer registration statement for the Tender Offer upon such decision, NEC extended the Tender Offer Period from December 25, 2024 to January 10, 2025, which is 10 business days after December 20, 2024, the filing date of the amendment to the tender offer registration statement. NEC plans to borrow funds up to ¥240 million from Sumitomo Mitsui Banking Corporation by the business day preceding the commencement date of settlement for the Tender Offer subject to the completion of the Tender Offer and the certain other conditions in order to cover the funds required for the Transactions, including the Tender Offer.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., SMBC Nikko Securities Inc. acted as financial advisors for NEC Corporation. Nagashima Ohno & Tsunematsu acted as legal advisor for NEC Corporation. Daiwa Securities Co. Ltd. acted as financial advisor and provided fairness opinion to NEC Networks & System Integration Corporation. Nishimura & Asahi acted as legal advisor for NEC Networks & System Integration Corporation.
NEC Corporation (TSE:6701) completed the acquisition of 22.54% stake in NEC Networks & System Integration Corporation (TSE:1973) from the group of shareholders ¥110 billion on January 10, 2025.
NEC Corp is a Japan-based company mainly engaged in the information technology (IT) services and social infrastructure businesses. The Company operates through two business segments. The IT Services segment provides system integration (system construction and consulting), support (maintenance), outsourcing and cloud services, and system equipment and software services. The Social Infrastructure segment provides network infrastructure (core networks, cell phone base stations, optical transmission systems, and marine systems), software and services for telecommunications carriers, and system equipment, system integration (system construction and consulting) and support (maintenance) in the aerospace and defense domain.
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