Electronics group EPCOS shares surge after TDK bid (2nd Roundup)

Jul 31, 2008, 11:13 GMT

Tokyo/Frankfurt - Shares in EPCOS AG surged nearly 30 per cent Thursday after Japan's TDK Corp unveiled plans to purchase the German electronics parts maker in one of the Japanese electronics industry's biggest takeovers.

TDK's 200-billion-yen (1.85-billion-dollar) bid for ESPOS forms part of plans by the Japanese group to boost its operations amid tough competition in Asia.

The result was to send EPCOS's shares up by 29 per cent to 17.88 euros (27.90 dollars) in early trading Thursday in Frankfurt.

This pushed the EPCOS share price above the 17.85 euros that TDK is offering for the group.

'EPCOS brings to the deal its strong position in the growing automobile and industrial machinery markets in Europe,' TDK chief Takehiro Kamigama said.

TDK is to launch a friendly tender offer for EPCOS shares converting the German company into a subsidiary by the end of this year, Jiji Press quoted informed sources as saying.

After the acquisition, the joint business was expected to become one of the largest companies in the Japanese electronics parts industry, with annual sales projections of more than 1 trillion yen.

TDK's strengths lie in the production of magnetic heads for hard disk drives as well as in electronics parts for household appliances like cellular phones, while EPCOS' flagship products are components for industrial instruments.