Pentax hopes white knight will fend off Hoya

Pentax, Japan’s oldest maker of single-lens reflex cameras, has set its hopes on a white knight saving it from a hostile takeover by Hoya, the specialist glassmaker.

The camera-maker is trying to fend off Hoya’s advances – in spite of having agreed to merge with the Japanese company last year.

Shinichiro Mitsuhashi, a managing director at Pentax, said: “We are confident that we can compete on our own. We wonder why we should go under the umbrella [of Hoya]. I imagine there is a strong chance a white knight might appear.”

Fumio Urano, the president of Pentax, resigned last month, after a boardroom coup during which the camera maker’s merger with Hoya was questioned and ultimately scrapped. It is understood that Takashi Watanuki, the new president, and other board members favour maintaining Pentax’s independence.

Under the terms of the initial agreement, announced in December, Hoya was set to exchange 0.158 of its shares for each Pentax share, which valued the camera maker at Y91bn ($761m) and represented a premium of 10 per cent. The two companies called the merger off last month.

Sparx Asset Management, Japan’s biggest activist hedge fund and Pentax’s biggest shareholder with a 24 per cent stake, is pushing for the return of Mr Urano and another board member in an effort to reignite the scuppered merger talks.

Sparx believes Pentax will need to merge with another firm to survive. But Pentax’s senior executives oppose being absorbed by another firm. Mr Mitsuhashi said: “Pentax is a traditional, small factory type of firm while Hoya is an American-style company. I wonder if merging the two companies would be successful.”

Pentax said its net profit more than quadrupled over the previous year to Y3.57bn, due to strong demand for its digital single-lens reflex cameras. The camera-maker plans to double its operating profit to Y11.2bn for the year ending March 2010 by focusing on businesses such as cameras and endoscopes.