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Lenovo declines 7.6% as Japan's NEC sells stake
Source: Bloomberg News |
September 6, 2012, Thursday
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Print Edition
Print Edition
LENOVO Group, the world's second-largest computer maker, fell the most in more than two months in Hong Kong trading yesterday after NEC Corp sold its stake in the Chinese firm to raise cash.
Shares of Lenovo fell 7.6 percent to HK$6.12 (79 US cents), the largest decline since June 21. The Hang Seng Index slid 1.5 percent. NEC fell 2.6 percent to 111 yen (US$1.42) in Tokyo, the biggest drop since August 28.
Lenovo had issued 281.1 million shares to NEC in exchange for a 51 percent stake in a venture between the companies. The shares were subject to a lock-up restriction that prohibited NEC from selling them until two years after the deal closed on July 1, 2011. Lenovo shares have risen 39 percent since then, and Lenovo on Tuesday waived the restriction barring NEC from selling stock.
"The overall stock market is weak today, and the sale just added selling pressure to the share price," said Jonathan Ng, a Singapore-based analyst at CIMB-GK Pte. "The sale is purely for financial reasons and will not change the business relationships."
Brion Tingler, a Lenovo spokesman, confirmed the company granted a waiver to NEC and referred questions about specifics of the sale to NEC.
"We believe this is an appropriate action based on NEC's requests and financing needs as well as our shared commitment to our long-term, ongoing strategic partnership," Tingler said in an e-mail yesterday. "We will continue to look for ways to expand and extend our strategic relationship."
NEC sold its entire 2.7 percent holding in Lenovo to make use of its assets, Takehiko Kato, a spokesman for the Tokyo-based electronics maker, said yesterday. The 18 billion yen sale resulted in a gain of 4 billion yen, he said. There won't be any change in NEC's venture with Lenovo, Kato said.
"We still expect Lenovo to leverage NEC's expertise on developing high-end commercial models," said Christine Wang, a Taipei-based analyst at Daiwa Capital Markets.
Shares of Lenovo fell 7.6 percent to HK$6.12 (79 US cents), the largest decline since June 21. The Hang Seng Index slid 1.5 percent. NEC fell 2.6 percent to 111 yen (US$1.42) in Tokyo, the biggest drop since August 28.
Lenovo had issued 281.1 million shares to NEC in exchange for a 51 percent stake in a venture between the companies. The shares were subject to a lock-up restriction that prohibited NEC from selling them until two years after the deal closed on July 1, 2011. Lenovo shares have risen 39 percent since then, and Lenovo on Tuesday waived the restriction barring NEC from selling stock.
"The overall stock market is weak today, and the sale just added selling pressure to the share price," said Jonathan Ng, a Singapore-based analyst at CIMB-GK Pte. "The sale is purely for financial reasons and will not change the business relationships."
Brion Tingler, a Lenovo spokesman, confirmed the company granted a waiver to NEC and referred questions about specifics of the sale to NEC.
"We believe this is an appropriate action based on NEC's requests and financing needs as well as our shared commitment to our long-term, ongoing strategic partnership," Tingler said in an e-mail yesterday. "We will continue to look for ways to expand and extend our strategic relationship."
NEC sold its entire 2.7 percent holding in Lenovo to make use of its assets, Takehiko Kato, a spokesman for the Tokyo-based electronics maker, said yesterday. The 18 billion yen sale resulted in a gain of 4 billion yen, he said. There won't be any change in NEC's venture with Lenovo, Kato said.
"We still expect Lenovo to leverage NEC's expertise on developing high-end commercial models," said Christine Wang, a Taipei-based analyst at Daiwa Capital Markets.
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