By Makiko Yamazaki and Kantaro Komiya
TOKYO (Reuters) -Chicago-based investor Curi RMB Capital said on Thursday that NEC and its listed unit Japan Aviation Electronics (JAE) should cancel their buyback deal and reconsider alternative buyout offers they have received.
The call came after Reuters reported NEC had received multiple buyout offers from global private equity funds for JAE before agreeing to tender much of its 51% stake to the unit at a discount via a tender offer.
Curi RMB, with more than $11 billion under management, owns shares in both NEC and JAE, which makes connectors used in smartphones including Apple (NASDAQ:AAPL)'s iPhones.
Both NEC and JAE declined to comment on Curi RMB's statement.
The buyback tender offer does not represent the best interest of shareholders of both companies, Curi RMB said in a statement, adding that it sees "potential conflict of interests" between JAE and NEC management and minority shareholders.
NEC and JAE should disclose more information regarding the multiple buyout offers they had received and explain why they did not accept these buyout offers, Curi RMB said.
If NEC and JAE do not do so, Curi RMB Capital said it plans to seek the companies' board minutes under court permission to evaluate their decision-making process and "pursue appropriate recourse against the board on behalf of shareholders".
At least three global funds indicated to both JAE and its parent NEC in the past they were willing to pay substantial premiums to buy out the maker of electronics components, sources told Reuters.
JAE disclosed after the Reuters report that it had received multiple buyout offers ahead of the ongoing tender offer, but said the buyback deal would best contribute to improving capital efficiency and shareholder returns.