Interesting how Wall Street is pursuing the Japanese semiconductor industry. Back in April I met a CEO of one of Japan’s top five chip companies saying he got calls every day from private equity firms wanting to talk to him.
Clearly the Japanese CEO wasn’t inclined to talk to the private equity people.
He must be glad he’s not in the position of the CEO of NEC Electronics, which is NEC Corp’s semiconductor subsidiary, and which is publicly quoted, but in which NEC Corp holds a majority shareholding.
NEC Electronics has a Wall St Stalker which is trying to acquire a significant stake (up to 25 per cent) in NEC Electronics, and is trying to reduce the representation of NEC Corp on the NEC Electronics board.
Of course the Wall St. Stalker can't force NEC to allow either of those things to happen, but the Stalker keeps making statements about how dreadfully unfair it is that it is not being allowed to have its way.
The Wall St Stalker, a.k.a. Perry Capital, seems to think there is something inherently anti-capitalistic about a company divesting itself of a minority stake in a subsidiary then floating its shares.
But no one has to buy these shares. People have bought shares in Philips for years, but its share structure ensures the Philips family keeps a controlling say in its future.
And that’s been a good thing for Philips, a good thing for the worldwide electronics industry, good for consumers and good for The Netherlands.
What has Perry Capital done for any of these groups?
Nothing I know of.
What would Perry Capital bring to NEC Electronics?
If the Freescale take-over by Blackstone is anything to go by: job losses, cut-backs in R&D, demoralisation and debt.
If I was a Japanese semiconductor CEO I’d know what to say to a Wall St Stalker.
Stick your dough where the sun don’t shine.
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