Business News

TOKYO, July 4 (APP/AFP): Shares in Japanese energy giant Idemitsu
Kosan plunged Tuesday following news it is raising $1.2 billion in a share sale ahead of a proposed merger with rival Showa Shell Sekiyu that is opposed by the company’s founding family.
The stock fell as much as 13 percent, the most in six years, before
ending the morning down 11.2 percent at 2,895 yen. Showa jumped 6.66 percent to 1,121 yen.
Idemitsu’s fall came as a filing showed it plans to raise about 138.5
billion yen in the stock sale, which could dilute its founding family’s 34
percent ownership stake and possibly clear the way for a merger of the rival
refiners.
“This was almost certainly done to dilute the founding Idemitsu
family’s holdings so the merger can take place,” said Andrew Clarke, director of trading at Mirabaud Asia in Hong Kong.
“I imagine the family will move to block the issue, so the merger
could be delayed.”
The sale of 48 million shares would shrink their stake in Idemitsu to
around 26 percent, according to Bloomberg News, below the one-third threshold needed to block a merger.
An Idemitsu spokesman said the sale is meant to help pay for
investments rather than dilute the family’s holding.