Japanese entertainment giants Bandai and Nintendo have both moved to play down merger and acquisition rumours which have surrounded the companies since Nintendo purchased a minority shareholding in Bandai last week.
As we reported last Friday [read more], Nintendo purchased a 2.7 per cent shareholding in Bandai, representing some 1.28 million shares worth 3.4 billion Yen (â'¬26.6 million) by today's prices - a move which sparked speculation in the Japanese business press that a further move to tie up the companies, in the form of a merger or an acquisition by Nintendo, could be on the cards.
Both companies have now moved to deny the rumours, however, with Bandai president Takeo Takasu telling a specially convened news conference in Tokyo that "Nintendo's purchase was not on a premise of any merger or equity tie-up."
For Nintendo's part, a spokesperson stated that "we don't have any intention of acquiring Bandai," although he did confirm that "if some Bandai shareholders ask us to buy additional share, we would consider the offer."
Analysts had commented that a tie-up between the two companies would make sense for both, with Nintendo able to build its market, particularly in Japan, through the popularity of Bandai franchises such as Gundam, Digimon and Power Rangers, as well as popular overseas franchises such as Dragon Ball, while Bandai would benefit from Nintendo's global reach and strong relationships with retail and distribution channels.
Indeed, even though a merger or acquisition is off the cards for now at least, a closer relationship between the two companies does seem possible. "We appreciate Nintendo taking our shares, which will help deepen our relationship as a business partner," commented Takasu-san at the conference - no doubt mindful of the fact that the announcement that Bandai would hold a press conference about the Nintendo acquisition rumours had sent the company's shares up by 5.79 per cent to 2,925 Yen - their highest price on the Nikkei stock exchange so far this year.