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Pentax Pres. to Resign over Merger Plan Feud

Pentax Corp. President Fumio Urano plans to resign to take responsibility for a dispute involving its merger plan with Hoya Corp. , sources familiar with the matter said Monday.

The move by Urano, 63, comes as six of Pentax's eight board members opposed Urano-led plans to merge with Hoya, the sources said.

In response, Hoya, a leading optical glass maker, is poised to change the method for integration with Pentax, a maker of digital cameras and medical equipment, to a tender offer from the initially planned share swap. Hoya's board is expected to adopt the change as early as Monday.

If Pentax's management still objects to the tender offer, Hoya's offer could become hostile.

Pentax board member Takashi Watanuki, 54, who opposed the merger, is expected to replace Urano as new president.

In December, the two companies announced a basic agreement to merge on Oct. 1 this year, under a deal that would create a comprehensive optical equipment maker with annual sales of some 500 billion yen.

Urano informed other board members of the merger plan only just before its announcement, one reason that alienated them, the sources said.

In addition, Hoya's chief executive, Hiroshi Suzuki, signaled the possibility of the merged company shedding Pentax's camera operations, a development that deepened the rift further, the sources said.

Major shareholders in Pentax, mainly investment funds, also opposed the merger plan, claiming that a premium under the present share swap ratio is too low for Pentax shareholders.

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