Bandai, Nintendo comment on recent stock activity

TOKYO--Japan's largest toy maker, Bandai, and stock-hungry game maker Nintendo each made public announcements after the closing of the stock market Wednesday, Reuters said. The companies hoped to clarify recent stock activity (previously covered in GameSpot) and address rumors circulating within the business community.

The announcements come after it was made known that Nintendo had acquired 2.6 percent of Bandai's public stock (or about 1.28 million shares) at the end of September. The stock acquisition sparked rumors of a company takeover by Nintendo, with consumers expressing concern that Bandai games would no longer be released for non-Nintendo platforms. Today, both companies took their case to the public, explaining some of the reasons behind the business activity and assuring the public that there are no corporate mergers or capital alliances planned for the future.

"Nintendo's purchase was not on the premise of any merger or equity tie-up," Bandai president Takeo Takasu told reporters during the news conference.

Takasu explained to the press that Nintendo's stock acquisition was done with mutual consent. In order to resolve cross-shareholding issues that Bandai had with financial institutions and other organizations, the company began looking in mid-August for a third party that could hold on to Bandai shares. Nintendo showed interest in becoming an investor for Bandai and they fit the bill, since they were a stable company that was not a financial institution.

"We appreciate Nintendo taking our shares, which will help deepen our relationship as a business partner," commented Takasu.

Nintendo bought Bandai shares from a number of financial institutions and the American toy manufacturer Mattel. Bandai and Mattel were recently engaged in a four-year contract to work as distributors for each other in different continents, but it was announced in September that the deal would terminate at the end of the year. Mattel originally held 4.22 percent of Bandai's publicly traded stock (or about 2.06 million shares). Mattel still holds some Bandai stock, but its holdings had dropped to 1.8 million shares by the end of September.

A Nintendo spokesperson emphasized that there were no plans for a corporate takeover but that Nintendo might consider buying more shares if they were offered for sale.

"If Bandai shareholders ask us to buy additional shares, we would consider the offer," commented the Nintendo spokesperson. "But we don't have any plans to acquire Bandai or any other company as a method to broadening our businesses. And capital alliances in the video game industry have no meaning since the developers can decide to move off to another company."

Bandai's stocks marked their highest price of the year today, rising 5.79 percent to 2,925 yen ($26.85). Nintendo shares closed up 0.34 percent to 8,780 yen ($80.60).