TOKYO – Investors in Tokyo were heavy sellers of shares in Panasonic on Tuesday after Nikkei reported that the business and consumer conglomerate was ready to buy U.S. supply chain software company Blue Yonder in $ 6.5 billion contract.
Shares in Panasonic fell at one point over 7% to a one-month high. The biggest drop was among the 225 companies that made up the blue Nikkei Average Stock index.
The sale was prompted by institutional investor concerns that the deal – the biggest buy for Panasonic since 2011 – will be a financial stretch for the Japanese company.
Tomoichiro Kubota, senior market analyst at Matsui Securities in Tokyo, said: “Institutional investors are selling while many retail investors are buying Panasonic stock because they believe the fall is as fairly good. “
Blue Yonder uses machine learning to support companies ’supply chain management. Several sources told Nikkei that Panasonic is in the final stages of negotiations to buy the company for about 700 billion yen ($ 6.5 billion).
Panasonic already has a 20% stake in Blue Yonder while the rest of the shares are owned by US-funded Blackstone and New Mountain Capital.
Panasonic said Tuesday: “No facts have been decided on this issue at this time, while Panasonic is considering a number of ways to increase corporate value.”
Masahiro Ono, an analyst at Morgan Stanley MUFG Securities in Tokyo, said if the reports are true the purchase will benefit the Japanese company. “Panasonic has positioned supply chain management solutions as a key growth industry, and by acquiring all segments of Blue Yonder, a growth strategy that capitalizes on Panasonic’s strengths would be feasible, “Ono said in a report.