Alpine/Alps Electric wave away criticisms of merger

An Alps Electric [TYO: 6770] spokesperson has maintained that the lengthy timetable is due to regulatory filings and not an attempt to buy Alpine Electronics [TYO: 6816] on the cheap.

The spokesperson’s comment comes in response to Hong Kong-based activist Oasis Management, who on Monday (30 October) raised questions over the fairness of both the drawn-out process and the valuation of the share-swap deal.

Alps Electric, an electronic component manufacturer which currently holds a 40.43% stake in Alpine Electronics, said on 27 July it would acquire the remaining publicly-held shares of the automotive component manufacturing subsidiary. The acquisition would be effective 17 months later on 1 January 2019 through a share swap, in which Alps will allot 0.68 common shares for each common share of Alpine.

The activist fund claims to be a holder of the Alpine stock for many years and emerged as the largest minority shareholder in Alpine with a stake of 9.18%, according to a financial document filed to the Kanto Finance Bureau on 30 October.

Noting the 2019 deadline, Oasis said in a statement that this would be the longest lead time of any merger in Japan in recent history. Alps is doing this to secure Alpine at a cheap price before the stock re-rates from an expected record operating profit in 2019 and 2020.

But the Alps spokesperson reiterated earlier comments that the effective date reflects the anticipated long lead time to secure antitrust clearances in various countries and complete a Form F-4 filing with the US Securities and Exchange Commission (SEC). Dealreporter also reported in August that the deal’s lengthy timeline partly relates to the uncertainty around the timetable for antitrust approvals in at least six jurisdictions including the US, China and EC.

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