* Honda mulls several bln yen investment in Pioneer -source
* Honda says approached by Pioneer, gives no more details
* Pioneer shares jump 7.5 percent, up a quarter since Tuesday
By Nobuhiro Kubo
TOKYO, April 23 (Reuters) - Honda Motor Co <7267.T> is
finalising plans to invest tens of millions of dollars in Pioneer
Corp <6773.T> to help rebuild the struggling electronics maker, a
company source said on Thursday.
Pioneer shares jumped 7.5 percent on Thursday, taking its
gains to more than a quarter since sources said on Tuesday it may
seek government help. Honda shares rose 1.7 percent.
A Honda spokeswoman said her firm had been approached by
Pioneer, a loss-making electronics maker withdrawing from its TV
operations and focusing resources on the auto electronics
business, but declined to elaborate further.
The move will help cash-strapped Pioneer shore up its capital
and strengthen ties with Japan's second-largest automaker.
"This is very positive. They've had a lot of trade with each
other in the past and to have Honda openly backing them up like
this should be good," Chibagin Asset Management fund manager
Hiroaki Osakabe said.
For Honda, an investment is expected by analysts to give it
access to Pioneer's car navigation and other auto
electronics-related technologies at a time when an increasing
number of microchips and other electronics components go into
cars.
"Several billion yen is not exactly a big amount of money for
Honda although it is facing a tough business environment," said
an auto analyst, who declined to be named.
"Also, auto makers cannot do everything in-house when it
comes to auto electronics. So, this might be a good opportunity
for Honda."
The Nikkei business daily said if Honda bought common stock,
the automaker could become a major shareholder with a stake of
around 5 percent.
A Pioneer spokesman said his firm has been in talks with
various companies and financial institutions on ways to restore
its financial health but declined to give further details.
Home and car electronics were two main earnings pillars at
Pioneer, but in recent years, its home electronics unit has been
in the red, hit by fierce competition with larger and more
cost-efficient rivals such as Samsung Electronics <005930.KS>.
The Tokyo-based company, owned 14 percent by Sharp Corp
<6753.T>, is set for a fifth straight annual loss for the
just-ended year to March 31.
Two sources close to the matter said on Tuesday that Pioneer
is considering applying for state funds available to companies
hit by the global financial crisis. The Nikkei has reported the
government would inject 30 billion yen. [nBNG1087]
($1=98.30 Yen)
(Additional reporting by Taiga Uranaka, Elaine Lies, Kiyoshi
Takenaka; Editing by Edwina Gibbs and Rodney Joyce)
((taiga.uranaka@thomsonreuters.com; +81-3-6441-1813; Reuters
Messaging: taiga.uranaka.reuters.com@reuters.net))
((If you have a query or comment on this story, send an email to
news.feedback.asia@thomsonreuters.com))
Keywords: HONDA PIONEER
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