Pentax to accept Hoya offer with conditions: source

TOKYO (Reuters) - Pentax Corp. 7750.T President Takashi Watanuki has told his counterpart at Hoya Corp. (7741.T) that his company is prepared to accept Hoya's tender offer with conditions, a person familiar with the matter said.

Hoya's tender offer bid, first reported in April, triggered a split on Japanese camera and medical equipment maker Pentax's board. The board eventually dumped company president Fumio Urano, who had led the talks with Hoya, and appointed Takashi Watanuki, who had opposed a merger.

Top Pentax shareholder Sparx Asset Management (8739.Q), a Tokyo-based investment fund, has been pressing the company to accept Hoya's sweetened tender offer, or come up with an alternative plan that could yield better returns.

Hoya has said it would be willing to pay 770 yen a share in a friendly tender bid, which is about one-fifth more than Pentax's implied price based on the equity swap ratio in an earlier deal.

The tender offer scheme could also lead to new players bidding for Pentax for a higher price to win over investors.

Pentax has been restricted from talking to potential white knight bidders or sponsors for a management buyout given an earlier agreement requiring that it talk exclusively with Hoya until May 31. It would have to pay a penalty if it talked to any third parties before then.

Last week, Pentax presented a midterm plan aimed at doubling its annual operating profit to 11.2 billion yen ($93 million) by 2010 as it focuses on three core businesses: cameras, lenses and medical equipment.

Analysts have said the plan is merely an extension of an earlier strategy, and doesn't compare with the offer from Hoya.