Kokusai Electric shares fall 9% on KKR share sale report By Reuters

By Sam Nussey

TOKYO (Reuters) – Shares in Kokusai Electric fell 9% in early Tokyo trading on Wednesday, a day after Reuters reported private equity firm KKR plans to cut its stake in the Japanese chip equipment manufacturer.

KKR plans to sell roughly half of its 43% stake in Kokusai to investors, Reuters reported late on Tuesday, cashing in after a blistering run for its shares, with the chip tool maker to buy back shares in the market.

“I assume the stock will tank on this news, then I assume it might rally a bit. That has been the pattern of recent offerings with buybacks attached,” wrote analyst Travis Lundy of Quiddity Advisors, who publishes on Smartkarma.

Shares in Kokusai, which had a market capitalisation of roughly $8.5 billion at Tuesday’s closing price, have gained about 75% year-to-date.

The company is targeting improved margins and investors are rushing to back chip equipment manufacturers amid expectations investment in technology such as artificial intelligence will boost the sector.