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Pentax to Call Off Hoya Share-Swap Plan

Pentax is expected to scrap a planned share-swap merger with Hoya at a board meeting on
Tuesday, a senior company official said, raising speculation that Hoya may suspend its plan to make a tender offer for the camera and medical equipment maker.

Shares in Pentax and Hoya fell in the Tokyo morning session Tuesday.

The latest development raises the question of whether Hoya will proceed with a planned tender offer bid for Pentax, with Pentax's board set to oppose the merger plan and its president planning to resign.

"It's unclear what Pentax's intentions are," a Hoya senior executive told Reuters late on Monday.

Pentax was holding an extraordinary board meeting on Tuesday morning at which members are expected to vote against a share-swap merger plan with Hoya that was announced in December, a senior Pentax official told Reuters.

Hoya was also expected to hold a board meeting on Tuesday to decide on making an official tender offer proposal to Pentax.

Hoya said on Friday it would make a tender offer for shares in Pentax, instead of the stock-swap deal it proposed originally, amid pressure from shareholders who felt the swap ratio undervalued Pentax.

If Hoya formally proposes making a tender offer, the Pentax board could discuss the offer, said a senior Pentax official, who asked not to be identified.

Pentax President Fumio Urano said on Monday that six of the eight Pentax board members had expressed objections to a merger with Hoya at a meeting on April 4 due to concerns that Hoya's corporate governance was too tough and that the plan would not win shareholder approval.

Following the split between board members, Urano said he planned to resign from his position.