Announcement on Changes to Subsidiary
Tokyo Electron Limited (TEL) announces the decision to sell a portion of its shares in its consolidated subsidiary Tokyo Electron Device Limited (TED) as below. As a result, expectations are that the status of TED will change from a consolidated subsidiary to an equity method affiliate.
1. Reasons for change
In the midst of a rapidly changing business landscape for the Tokyo Electron Group, the group has spent considerable effort investigating future growth strategies for both TEL and TED as we look to develop our businesses going forward. As a result, TEL has decided to sell a portion of its shares in TED in order to improve the value of both our enterprises. This will enable us to plan for a greater concentration of management resources in our core equipment business, and for TED to actively drive its development business and overseas expansion in addition to existing sales of electronic components and computer network related products while becoming even more independent and building its own growth strategies for the future.
2. Method of change
TEL holds 5,875,300 ordinary shares in TED, but effective today as announced by TED in its “Notification of sale of shares, and of changes to the parent and other related companies, (Note1)” TEL plans to sell 2,120,000 of its shares in TED through an underwritten offering. Also effective on the same day, TED announced a share repurchase (to a maximum total of 636,000 shares, to a maximum total value of JPY 1,070,000,000) in its “Notification of decision regarding matters concerning share repurchase (repurchase of own shares based on provisions of the Articles of Corporation in accordance with Article 459, Paragraph 1 of the Companies Act), (Note1)” where TEL would sell down a portion of its shares in TED, which if actioned would reduce the above-mentioned number of shares on offer.
Note1: The document is only used in Japanese.
3. Overview of subsidiary to be changed (Tokyo Electron Device Limited)
| (1)Company Name | Tokyo Electron Device Limited | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (2)Address | 1-4, Kinko-cho, Kanagawa-ku, Yokohama City, Kanagawa, Japan | ||||||||||||||||||||||||
| (3)Representative Director | Yasuyuki Kuriki, President, Representative Director | ||||||||||||||||||||||||
| (4)Business Operation | Electronic Components, Computer Network | ||||||||||||||||||||||||
| (5)Capital Stock | JPY 2,495,750 thousand (as of December 31, 2013) | ||||||||||||||||||||||||
| (6)Established | March 3, 1986 | ||||||||||||||||||||||||
| (7)Major Shareholders and Shareholding Ratio (as of September 30, 2013) |
|
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| (8)Relationship between Tokyo Electron Limited and Tokyo Electron Device Limited | Capital Relationship | As of December 31, 2013, TEL holds 5,875,300 ordinary shares in TED. | |||||||||||||||||||||||
| Personnel Relationship | One TEL director also acts as a director for TED. | ||||||||||||||||||||||||
| Business Relationship | TEL orders some business services from, and is involved in land lease and other dealings with, TED. | ||||||||||||||||||||||||
| (9)Operating Results and Financial Status for the Latest 3 Years | |||||||||||||||||||||||||
| Fiscal Year | Ended March 2011 | Ended March 2012 | Ended March 2013 | ||||||||||||||||||||||
| Consolidated Net Assets | 23,220,730 | 23,381,990 | 23,544,570 | ||||||||||||||||||||||
| Consolidated Total Assets | 50,254,839 | 46,391,108 | 47,557,009 | ||||||||||||||||||||||
| Consolidated Net Assets per Share | 219,063.50 | 220,584.82 | 222,118.59 | ||||||||||||||||||||||
| Consolidated Sales Amount | 91,315,782 | 86,300,226 | 85,477,675 | ||||||||||||||||||||||
| Consolidated Operating Income | 2,745,708 | 2,011,488 | 1,790,428 | ||||||||||||||||||||||
| Consolidated Ordinary Income | 2,941,868 | 2,332,997 | 1,292,896 | ||||||||||||||||||||||
| Consolidated Net Income | 1,918,141 | 960,823 | 658,636 | ||||||||||||||||||||||
| Consolidated Net Income per Share | 18,095.67 | 9,064.37 | 6,213.55 | ||||||||||||||||||||||
| Dividend per Share | 6,600.00 | 6,600.00 | 6,600.00 | ||||||||||||||||||||||
Note:
1. Numbers are in thousands of Japanese Yen; however, for Consolidated Net Assets per Share, Consolidated Net Income per Share and Dividend per Share, numbers are in Japanese Yen.
2. With the effective date of October 1, 2013, 100-for-1 ordinary share split was conducted.
4.Voting rights (number of shares held) and proportion of voting rights of all shareholders before and after change
| Status | Number of voting rights (number of shares held) |
Proportion of voting rights of all shareholders |
|
|---|---|---|---|
| Before change (as of March 26, 2014) |
Consolidated subsidiary | 58,753 （5,875,300 shares） |
55.42％ |
| After change | Equity method affiliate | 37,553 （3,755,300 shares） |
37.68％ |
Note:
1. As per “2. Method of change” above, TEL plans to sell 2,120,000 of its shares in TED through an underwritten offering.
2. The proportion of voting rights of all shareholders before the change was calculated on the basis of 106,000 voting rights of all shareholders as of September 30, 2013.
3. The proportion of voting rights of all shareholders after the change was calculated on the basis of 99,640 voting rights of all shareholders, being the result of reducing initial voting rights by 6,360 votes assuming 636,000 shares acquired through a maximum share repurchase by TED as per “2. Method of change” above.
4. The proportion of voting rights of all shareholders was truncated to two decimal places.
5. With respect to the underwritten offering as detailed in “2. Method of change” above, exercise of the Green Shoe Option may further reduce the number of voting rights (number of shares held) by a maximum of 2,226 (222,600 shares) after the change.
5. Planned change date
Delivery date of shares in TED relating to the sale of the shares (six business days after the determination date for sales price and other matters relating to the sale of shares in TED, and also any of the days from April 15 through April 18, 2014)
6. Future outlook
TEL is reviewing any effect the change will have on TEL's business performance for the fiscal year ending March 2015, and will promptly announce any disclosure matters if they arise.
(For reference)
Consolidated financial forecast for the year ending March 31, 2014 (April 1, 2013 - March 31, 2014)
(Published on December 18, 2013)
| Net sales | Operating income | Ordinary income | Net income | Net income per share |
|
|---|---|---|---|---|---|
| Consolidated financial forecast for the year ending March 31, 2014 | Millions of yen 605,000 |
Millions of yen 30,000 |
Millions of yen 33,000 |
Millions of yen △22,000 |
Yen △122.78 |
| Results for the year ended March 31, 2013 | 497,299 | 12,548 | 16,696 | 6,076 | 33.91 |
Note: This document serves as a press release for the purpose of making public announcements related to changes to TEL's subsidiary. It has not been produced for the purpose of soliciting investment in any sale of TED shares.
