Reuters has reported that Turkish producer Vestel said on Wednesday it would start talks with Whirlpool Europe about a white goods joint venture.
Each firm would be to hold an equal stake and Vestel would transfer all its shares in Vestel White Goods Inc. to the new, as yet unnamed, company.
The news has sent shares in Vestel White Goods down 7.9 percent to 3.94 lira as analysts said rumours had previously hinted at a cash sale and news of the joint venture initially disappointed.
Vestel’s shares had risen 65 percent since end-July, compared with a 6 percent rise on the wider market.
“It had been widely rumoured in the market, the rumour was that Vestel White Goods would be sold … part of the rumour was that it would be a cash sale,” Oyak Securities senior analyst Cemal Demirtas said, adding however that the long-term outlook was positive. He added that the stock was also falling as a tender call for the outstanding shares was not expected.
Vestel holds a 72.6 percent stake in Vestel White Goods while the remaining is free float.
Vestel shares were down 3.7 percent at 3.68 lira.
Vestel posted a 35.26 million lira loss ($29.14 million) in the first half of 2007, said the purpose of the joint venture would be to strengthen commercial activities in foreign and domestic white goods markets.
Like other Turkish electronics and white goods makers, Vestel faces growing competition from new foreign players in its home market as prices and profit margins fall in Turkey’s fast-growing consumer market.
Its sales fell 16.9 percent in the first half to 2.11 billion lira.
Vestel’s share in the electronics goods markets is around 36-37 percent, and around 17-18 percent in white goods, the company said earlier this month.
