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Matsushita, the Japanese industrial conglomerate, is mulling “at least five” separate offers for its controlling stake in Victor, the struggling group behind the
JVC consumer electronics brand.

According to sources close to negotiations, Matsushita has begun an informal process accepting bids for its 52 per cent holding in the loss-making JVC unit and is expected to reach a decision before the end of March.

Analysts believe that Matsushita is keen to abandon its 50-year relationship with Victor as part of its continuing restructuring drive.

At least two of the bids are understood to have come from private equity funds, with another offer thought to be a management buy-out proposal backed with capital from Cerberus, the US investment group.

Texas Pacific Group and Europe’s Permira are both believed to have bids on the table – both have also failed to lock down large, worthwhile deals in Japan despite entering the market with big ambitions. The prospect of buying large public companies in Japan arises very rarely.

Weekend Japanese media reports that Matsushita was in talks with private equity firms provoked an explosion of buying action in Victor shares on Monday. Any successful bidder for the whole of Matsushita’s stake would, under Japanese law, be obliged to tender an offer for the entire company, almost certainly at a premium to their recent price.

Victor, which has a market capitalisation of Y153bn ($1.2bn), on Monday rose nearly 15 per cent on a day in which the Nikkei 225 Average fell sharply.

Shares in Kenwood, which was thought to have made an offer for a 33 per cent stake in Victor last December, also jumped.

“The apparent arrival of private equity to this Victor auction,” said one analyst, “suggests that Matsushita was not able to negotiate anything solid with Kenwood. But investors will not be too disappointed by that because, at best, a Kenwood-JVC merger would have been two distressed brands propping each other up.”

Despite its 79-year history as a leading brand in consumer electronics, JVC has suffered in recent years from the breakneck industrial pace required to survive in the digital era. The company last week announced year-on-year net losses for the October to December quarter of Y1.5bn.

Although the company remains a strong player in video cameras and in-car audio and navigation systems, the company has been a victim of the steep price falls in flat-panel televisions. Like Pioneer, JVC has proved too small to compete with giants such as Sony and Samsung in TVs, but has persevered with the technology in an effort to keep its brand in consumers’ living rooms.

Matsushita is also believed to have received an offer from Funai Electric, which is keen to expand its flat-panel TV business there.

Copyright The Financial Times Limited 2017. All rights reserved.
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