By Nobuhiro Kubo
TOKYO (Reuters) - Honda Motor Co (7267.T:
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Pioneer shares jumped 7.5 percent on Thursday, taking its gains to more than a quarter since sources said on Tuesday it may seek government help. Honda shares rose 1.7 percent.
A Honda spokeswoman said her firm had been approached by Pioneer, a loss-making electronics maker withdrawing from its TV operations and focusing resources on the auto electronics business, but declined to elaborate further.
The move will help cash-strapped Pioneer shore up its capital and strengthen ties with Japan's second-largest automaker.
"This is very positive. They've had a lot of trade with each other in the past and to have Honda openly backing them up like this should be good," Chibagin Asset Management fund manager Hiroaki Osakabe said.
For Honda, an investment is expected by analysts to give it access to Pioneer's car navigation and other auto electronics-related technologies at a time when an increasing number of microchips and other electronics components go into cars.
"Several billion yen is not exactly a big amount of money for Honda although it is facing a tough business environment," said an auto analyst, who declined to be named.
"Also, auto makers cannot do everything in-house when it comes to auto electronics. So, this might be a good opportunity for Honda."
The Nikkei business daily said if Honda bought common stock, the automaker could become a major shareholder with a stake of around 5 percent.
A Pioneer spokesman said his firm has been in talks with various companies and financial institutions on ways to restore its financial health but declined to give further details.
Home and car electronics were two main earnings pillars at Pioneer, but in recent years, its home electronics unit has been in the red, hit by fierce competition with larger and more cost-efficient rivals such as Samsung Electronics (005930.KS:
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The Tokyo-based company, owned 14 percent by Sharp Corp (6753.T:
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Two sources close to the matter said on Tuesday that Pioneer is considering applying for state funds available to companies hit by the global financial crisis. The Nikkei has reported the government would inject 30 billion yen. ($1=98.30 Yen)
(Additional reporting by Taiga Uranaka, Elaine Lies, Kiyoshi Takenaka; Editing by Edwina Gibbs and Rodney Joyce)
Source;
http://uk.reuters.com/article/governmentFilingsNews/idUKN2226826620090423
TOKYO (Dow Jones)--Pioneer Corp. (6773.TO) said Tuesday that Honda Motor Co. (7267.TO) has completed payment of around Y2.50 billion for new shares in the electronics company.
