(Bloomberg) — Nidec Corp. is offering ¥257.3 billion ($1.6 billion) to take over machine tool builder Makino Milling Machine Co., initiating a rare unsolicited takeover of a Japanese company.
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The Kyoto-based maker of precision and automotive motors said it’s offering ¥11,000 per share for Makino Milling, a 42% premium to the company’s Thursday close. Makino Milling’s shares went untraded Friday morning because of a glut of buy orders. Nidec’s stock rose as much as 5.3% after announcing the tender offer, which was reported earlier by the Nikkei as a hostile bid.
Nidec, the world’s top maker of mini motors, is fighting both lackluster demand for hard drives and cut-throat prices in China’s electric-vehicle market. It’s been seeking entry into higher-margin areas of growth under new leadership. Eighty-year-old founder Shigenobu Nagamori stepped aside in April, tasking Mitsuya Kishida to advance the company’s push into EV motors as chief executive officer.
Nagamori has said he’s staying on to drive the group’s acquisitions and that he’s prepared to spend as much as ¥1 trillion to reach ¥10 trillion in sales by March 2031. Since 1984, Nagamori and his hand-picked M&A team have spearheaded more than 70 deals. If successful, a Makino Milling deal would mark Nidec’s single largest deal and would be at least the second time the 51-year-old company has initiated an unsolicited takeover attempt.
Founded in 1937, Makino Milling supplies machine tools to aerospace, automotive, semiconductor and construction industries. Its customers include robot makers Daifuku Co. and Fanuc Corp., as well as Toyota Tsusho Corp. and Nikon Corp., according to data compiled by Bloomberg.
Nidec said it hasn’t held discussions with Makino Milling yet. While it will try to win the company’s board over, it plans to go through with its tender offer if certain conditions are met, it said in a statement. It expects its tender to begin on April 4.
Many Japanese machinery companies are priced cheaply, in part due to their deep ties to carmakers, according to Hideyuki Suzuki, a general manager at SBI Securities. With a price to book value ratio of less than 1, “Makino Milling may be due for a reevaluation of its capital policies,” he said.
It’s not the first time Nidec has attempted a potentially hostile takeover, in a country where such deals are usually agreed-upon beforehand. Last year, it announced an unsolicited bid for Takisawa Machine Tool Co., which eventually consented to the deal.
