Struggling Sharp 'to sell its stake in Pioneer'
As Sharp struggles to turn around its current financial plight, it looks set to offload its curent 9.2% stake in Pioneer, according to reports in the Japanese financial press.
Sharp is Pioneer's largest shareholder, but is said to be seeking to offload its entire holding to companies better placed to work with Pioneer, and has apparently been negotiating with businesses in the automotive and medical sectors.
The current Sharp holding of 30m Pioneer shares is worth around ¥6.3bn (£42m) at the current stock price, a fraction of the investment Sharp made when the two companies formed a capital alliance six years ago.
At the time, Sharp invested ¥41.4bn in new Pioneer shares, while Pioneer invested ¥19.bn in the other direction, with the intention of the two co-operating in a range of areas including optical discs and in-car equipment.
When that deal was done, Sharp shares were trading in the ¥2000-2500 range, and Pioneer's around ¥1500-2000: since then both companies' stock market values have plummeted.
Sharp rose briefly from ¥345 to ¥403 today on the reports, before settling back to ¥370, while Pioneer shares opened at ¥218, rose to ¥233, and then dropped back to close at ¥219.
It's thought Sharp intends to use the proceeds of the sale to reduce its current debt, and that Pioneer will retain 10m Sharp shares, representing a 0.8% stake in the company.The two will continue to co-operate in areas such as optical discs.
A Sharp official said it has not made any decision on the reported sale.
Written by Andrew Everard