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Two of Japan?s most troubled consumer electronics groups were on Thursday given a boost after high-profile investors expressed confidence in their ability to turn round their fortunes.
Sony?s share price rose 5 per cent to Y4,630 after Prince Alwaleed bin Talal, the Saudi billionaire investor, told a Japanese newspaper he was interested in buying the struggling group?s shares.
Separately, Sanyo surged 19 per cent to Y337 after it announced on Wednesday that it would raise Y300bn ($2.6bn) by issuing preferred shares to Goldman Sachs, Daiwa SMBC Principal Investments and Sumitomo Mitsui Bank.
Both groups have suffered from concerns about their ability to revive their ailing consumer electronics operations in the face of sharply falling product prices and intensifying competition.
However, Prince Alwaleed indicated to the Nihon Keizai Shimbun business daily that he believed Sony was undervalued. Although Sony?s share price has fallen as a result of its poor business results, ?a revival under its new foreign chairman [Sir Howard Stringer], like the one achieved by Nissan, is by no means impossible?, the Prince said, adding that he was in the process of studying the prospects for Sony?s future share price and business performance.
The prince?s investment success has been based on picking out underperforming stocks. He bought a stake in Citigroup in 1991 at a time when the US financial services group was struggling. His 4 per cent holding is now worth about $10bn. He also holds 3 per cent of Apple Computer, which competes with Sony in sectors such as digital music players.
Earlier this year, Prince Alwaleed converted his non-voting shares in News Corp to a 5.46 per cent voting stake, a move seen as bolstering Rupert Murdoch?s defences against John Malone?s Liberty Media. The prince was also part of a consortium that bought the UK Savoy hotel group, adding to hotel interests such as the George V in Paris.
Meanwhile, Sanyo?s share price surged on Thursday after news that Goldman Sachs and Daiwa SMBC would each pay Y125bn and Sumitomo Mitsui Bank Y50bn to acquire preferred shares in the electronics group.
While the fund-raising exercise could eventually lead to a dilution of their holdings, investors saw it as significantly reducing San-yo?s risk of bankruptcy.