Olympus hears pitches from potential partners

January 12, 2012

Executives of scandal-plagued Olympus Corp. are seeking a company for a capital and business partnership to help rebuild its sagging business.

Sources said at least five companies had expressed an interest in a tie-up with Olympus, and the companies will be asked to submit business plans. Olympus officials will compare the various plans and decide on a partner by February at the earliest.

Sources said the companies Olympus was considering as potential partners are Sony Corp., Panasonic Corp., Fujifilm Holdings Corp., Terumo Corp. and Samsung Electronics Co. of South Korea.

Terumo is a manufacturer of medical equipment with a capital relationship already in place with Olympus.

Olympus executives have commissioned a securities company to handle the search for a business partner. Sources said the securities company has already heard pitches from the various companies about business plans for the partnership and some of the companies have submitted plans in writing.

After all the companies have submitted business plans, Olympus officials will select a business partner after considering the possible effects on their main areas of business.

A final decision will be made before an extraordinary shareholders meeting that will likely be held in March or April.

Once a partner has been selected, that company will be asked to take a small stake in Olympus stock.

After Olympus President Shuichi Takayama and other executives resign to take responsibility for the scandal at the extraordinary shareholders meeting, a new group of executives is expected to increase Olympus capital by several hundreds of billions of yen in fiscal 2012, and the new partner is expected to take on some of that capital.

Analysts said Olympus officials were choosing to enter a business partnership rather than obtaining more capital through financial markets due to expectations of greater synergetic effects, in terms of business channels and re-establishing trust in Olympus.

Among the main product lines for Olympus are cameras and endoscopes, in which it has about a 70 percent share of the global market.

The five companies being considered as potential business partners have sought to strengthen their own medical-related business sectors because of the expected growth in that area, so a partnership with Olympus would also be in their interests.

As a result of revisions to past financial statements to reflect the cover-up of past losses from investments, Olympus reported net assets of 45.9 billion yen ($597 million) for the end of the September 2011 six-month period. That was a sharp decrease from the net assets of 166.8 billion yen reported at the end of March, before the financial statements were revised.

Rebuilding the financial structure and business are urgent tasks facing Olympus executives.

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Olympus Corp. will seek a prospective partner for a capital and business tie-up in order to stay afloat. (Louis Templado)

Olympus Corp. will seek a prospective partner for a capital and business tie-up in order to stay afloat. (Louis Templado)

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  • Olympus Corp. will seek a prospective partner for a capital and business tie-up in order to stay afloat. (Louis Templado)

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