TOKYO Matsushita has accepted a bid by Texas Pacific Group (TPG) to purchase its JVC subsidiary and has begun talks to complete the deal by the end of March, according to sources close to the companies.
Matsushita received bids for JVC from TPG and Cerberus Capital Management. TPG offered a better price while the Cerberus bid involved the current JVC management team, sources said.
Matsushita and TPG reached a basic agreement on Friday (March 16) and are now working out details of the acquisition, including the final sale price.
Matsushita will sell all of its shares, totaling 52.4 percent of JVC's equity. JVC's closing stock price on the Tokyo Stock Exchange Friday was ¥606 ($5.20). A total of 254 million JVC shares have been issued; JVC's aggregate market value totals ¥154 billion ($1.32 billion).
JVC's stock price has risen slightly since reports surfaced on March 3 that Matsushita was seeking bidders.
TPG intends to buy all JVC stock, then delist the company during a restructuring. TPG will again list JVC in the next five years. However, sources said that TPG won't keep JVC that long since there appears to be strong interest in parts of JVC by other potential buyers.
JVC was established in 1927 as a gramophone manufacturer. It developed the VHS video recorder in 1976, and reigned over the consumer electronics industry with its VHS video products. But the success of its VHS analog tape format hindered JVC's shift to digital technologies.