CHIPMAKER Renesas shares ceased trading due to a surge in buy orders after rumours circulated that it will get bailed out by a Japanese government fund and auto companies.
Renesas, like its fellow Japanese chipmakers, has been suffering as demand for its chips has dried up, with the firm looking for a bailout. Rumours surfaced last month that the firm would be receiving a $1.3bn offer from private equity firm KKR, but Reuters' sources said taxpayer funded Network Corporation's 150bn JPY investment sent Renesas' share price higher.
As Renesas saw its share price rise by over 30 percent from Friday's close, the firm's shares ceased trading. Renesas' stock trading was stopped because there was no confirmation about whether it was in talks with the Japanese taxpayer fund and companies such as Toyota in a bailout deal.
According to the Nikkei business daily, an offer might be sent to Renesas' major shareholders NEC, Hitachi and Mitsubishi next month. According to Nikkei, the group wants to acquire a majority stake in Renesas.
Toyota's involvement in any deal is not a major surprise, as Renesas supplies a number of car companies. Given that Renesas relies heavily on sales of chips used in automobiles and Japanese car makers like to have some control over their supply chains, a deal between Renesas and members of Japan's automobile industry could work out well for both sides. µ
Sign up for INQbot – a weekly roundup of the best from the INQ