Nomura investment unit bids for CCI – Nomura Principle Finance, CCI Corp

Nomura investment unit bids for CCI – Nomura Principle Finance, CCI Corp – Brief Article

Charles Smith

Byline: Charles Smith

TOKYO — A unit of Japanese brokerage Nomura Securities Co. has offered to buy CCI Corp., which makes chemicals used in automobile components.

Nomura Principle Finance Co., an investment subsidiary of Nomura Securities, said Thursday it had made a [yen]10.4 billion ($83.7 million) offer for CCI, which holds a roughly 50% share in the domestic market for brake fluids and anti-freeze and is listed on the Tokyo over-the-counter market, known as Jasdaq.

Nomura spokesman Toshiyasu Iyama said the offer hinges on Nomura gaining 70% control by the time the bid closes Aug. 21.

NPF has already secured acceptance from CCI’s management and from institutional shareholders. The two groups together own 54.05% of the company’s shares.

The Nomura offer works out to [yen]850 per share, or [yen]250 above CCI’s closing share price Thursday. Nomura said the offer was priced at a 52.9% premium above the average price of CCI shares during the past six months.

The vehicle for acquiring CCI will be NPF Investment Co., a wholly owned special-purpose subsidiary of NPF. Nomura said there was a strong possibility that NPF Investment would merge with CCI if and when the bid is completed. This would lead to CCI’s delisting from Jasdaq.

NPF was established in July 2000 to make private equity investments and to buy and take private listed companies. The CCI offer is the company’s second deal. In October 2000, it bought control of Dowa Corp., an unlisted company which makes machines that insert advertising flyers into newspapers at local delivery offices.

CCI is trying to diversify into non-auto-related areas to reduce its dependence on Japan’s shrinking domestic auto market. To free up funds for diversification, CCI could suspend or reduce dividends to shareholders. Delisting the company would make this easier, analysts said.

Iyama said Nomura would support the diversification strategy and would eventually resell control of CCI back to the current management. Nomura hasn’t decided whether to unload the rest of its stake through a trade sale or to take the company public again after CCI completes its diversification strategy.

CCI owns 70% of Intac Automobile Products, a U.S. manufacturer of brake fluids. Intac contributed about [yen]5 billion worth of sales to CCI’s [yen]16.1 billion consolidated sales in the year ending March.

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