Pentax ready to accept merger with Hoya

The Yomiuri Shimbun

Precision instrument maker Pentax Corp. is poised to accept a proposal to merge with glass and lens maker Hoya Corp. as part of Hoya's takeover bid, it was learned Tuesday.

Pentax has unofficially said it is likely to agree to a takeover bid by Hoya and Pentax's largest shareholder, the asset management company Sparx Group.

Pentax President and Chief Executive Officer Takashi Watanuki and Hoya Chief Executive Officer Hiroshi Suzuki also planned to hold a top-level meeting Wednesday to discuss the merger plans, and it is likely they will discuss specific conditions for the takeover.

The company's reconstruction problems also may be resolved.

Pentax's management announced Friday proposals to strengthen management in an effort to survive independently. However, its current share price has dipped below the 770 yen per share being offered by Hoya in its takeover bid. If it should fall further, it is likely major shareholders could sue Pentax.

"It is difficult to come up with a proposal as good as merging with Hoya," a Pentax insider said.

As a condition of accepting the takeover, Pentax is demanding a guarantee of management independence and the removal from the board of directors of former senior managing director Katsuo Mori and former president Fumio Urano, who had spearheaded the merger talks with Hoya.

Adjustments to the conditions remain to be made if Hoya and Sparx are to accept them.

(May. 16, 2007)