Tuesday, April 10, 2007

Pentax and Hoya Take a Step Back From Merger Plans

Pentax President Fumio Urano resigned today, effectively stepping down for Takashi Watanuki to take over, after discussions between Hoya and Pentax reached an impass in negotions of their share-stock trade merger. Also resigning is Chief Financial Officer Katsuo Mori.

Essentially, Urano says the majority of his board members didn't like the way Hoya was planning to shake-up Pentax's present management. On April 4th, 6 of the 8 board members (all except Urano and Mori) said that they felt shareholders wouldn't like the changes Hoya would introduce to Pentax's operations. This is what many long-time Pentax followers have been antsy about, too. There was extra worry that Hoya was less interested in the consumer digital camera division than the Pentax board hoped for them to be, when Hoya's President, Hiroshi Suzuki, said as much last December. Still, investors were guessing that Hoya might be a strong boost for the smaller divisions. Hoya are still trying to approach Pentax and Watanuki with another bid, although a share swop or cash bid now seems unlikely to be accepted.

Personally, I sort of admired Fumio Urano's style, although Pentax seems to have given him a vote of no confidence based on the way he set up negotiations with Hoya. Takashi Watanuki might make a good president for Pentax, but it's understood that he supported the merger with Hoya as well. The board members seem to be protecting something at stake for Pentax in the proposed merger, and that's a sign of strong commitment to the present operations agenda.

Links: Asahi.com News, Reuters News Article, Imaging Resource/Bloomberg

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