Hitachi Construction Machinery Co. shares extended their decline on Wednesday, following the news that its major shareholder, Hitachi Ltd., had sold off ¥90.1 billion ($571 million) worth of stock in a block trade. This event marked the third consecutive day of losses for Hitachi Construction Machinery's shares, making it their longest losing streak since March.
The shares fell by as much as 5.5%, reaching ¥5,143. This price, however, remained above the ¥5,121 offering price set by Hitachi Ltd. in the block deal. The offering price itself was positioned near the midpoint of the marketed range, which spanned from ¥5,062 to ¥5,171.
This sale is part of Hitachi Ltd.'s broader strategy to reduce its strategic shareholdings. Hitachi Ltd. expects to recognize 179.9 billion yen in special gains in its single-entity financial results for the fiscal year ending March 2027 from the sale of Hitachi Construction Machinery shares. However, this will have no impact on its consolidated earnings outlook as the relevant investment securities are classified as financial assets measured at fair value through other comprehensive income under IFRS.
SMBC Nikko Securities Co., Ltd. temporarily became a major shareholder, acquiring 10.1% of voting rights, as Hitachi Ltd. ceased to be a major shareholder. SMBC Nikko plans to resell these shares to other domestic and international institutional investors. Despite the change in ownership, the business relationship and collaboration between Hitachi Ltd. and Hitachi Construction Machinery Co. are expected to continue.
