Panasonic sweetens Sanyo bid, Goldman may counter

By Taro Fuse and Taiga Uranaka

TOKYO (Reuters) - Panasonic Corp (6752.T) has sweetened its offer for Sanyo Electric Co (6764.T) by 8 percent to about $8.6 billion, sources familiar with the matter said, but major shareholder Goldman Sachs (GS.N) rejected the offer and threatened to launch a counter bid.

Panasonic, the world's largest maker of plasma TVs, said last month that it wanted to buy smaller rival Sanyo but it has yet to agree to a price with Goldman and two other main shareholders, Sumitomo Mitsui Banking Co and Daiwa Securities SMBC.

Panasonic has raised its offer by 10 yen to 130 yen per share and Sumitomo Mitsui and Daiwa SMBC are positively considering it, three sources told Reuters, speaking on condition of anonymity because the negotiations are not public.

But the new offer is still 12 percent below the current market price and not high enough to satisfy Goldman, which said it may exercise a right to buy the shares held by Daiwa SMBC and Sumitomo Mitsui, a move that would give it control of Sanyo.

"We don't believe this process and the price is fair for all Sanyo's shareholders," Goldman said in an e-mailed statement. "We will consider our options including exercising the first refusal right."

The deal would be worth $8.6 billion at 130 yen per share, factoring in the conversion of preferred shares bought by the three shareholders in a bailout of Sanyo in 2006.

Goldman wants to sell its shares at more than 250 yen apiece, a premium of roughly 30 percent on the stock's average price in the past three to six months, the Nikkei business daily said earlier on Thursday.

Mizuho Securities analyst Ryosuke Katsura said the sweetened offer was not a bad deal for Goldman, which bought the preferred shares for the equivalent of 70 yen.

"I don't know if Goldman will actually exercise the first refusal right, but 250 yen per share is far from what could be expected in the current market conditions," he said.

Panasonic is keen to buy Sanyo because of Sanyo's solid position in the rechargeable battery and solar power markets, both thought to have strong growth potential as demand increases for greener energy sources.

It could still gain control of Sanyo without Goldman, which would own a 29 percent stake if it converted its preferred stock, by buying out Daiwa Securities SMBC and Sumitomo Mitsui, which hold a combined 40.6 percent, and other minority shareholders.

Sources said Panasonic, formerly known as Matsushita Electric, may still go ahead and launch a bid for majority control of Sanyo as early as next month even without Goldman's support.

A spokesman at Panasonic declined to comment.

Goldman, Sumitomo Mitsui and Daiwa SMBC combined hold almost 430 million preferred shares, each of which can be exchanged for 10 common shares.

Daiwa Securities SMBC is a joint venture between Daiwa Securities Group Inc (8601.T) and Sumitomo Mitsui Financial Group Inc (SMFG) (8316.T). Sumitomo Mitsui Banking Corp is Sanyo's main bank and part of SMFG.