Goldman Sachs has today snubbed a second, raised offer by Panasonic for the stake that the Wall Street investment bank holds in Sanyo, the struggling Japanese electronics group it rescued from annihilation two years ago.

Panasonic, whose senior executives have previously indicated a fierce yearning to buy Sanyo, approached Goldman Sachs earlier today with an offer of 130 yen per share.

Panasonic is hoping to use Sanyo, whose head offices are on the same street in Osaka, to fill two major gaps in its portfolio: lithium batteries and solar panels — areas that are expected to drive growth in consumer electronics and energy supply investment once the world crawls out of recession.

But the current downturn has already bludgeoned the industry far harder than previously expected.

Following similarly draconian downgrades by its peers, Panasonic last week hit the market with a 90 per cent cut in its profits forecasts and warnings over the grim headwinds faced by global consumer electronics markets as the US and Europe slide into deeper recession and growth in China and other emerging markets begins to pall.

Panasonic’s previous offer of Y120 per share was thrown out by Goldman on the basis that neither the price nor the process of Panasonic’s bid for Sanyo was fair on shareholders.

That offer was substantially below the current market price for Sanyo shares, although well above the Y70 per share point at which Goldman Sachs and the two other leading Sanyo investors bought their preferred shares.

The Wall Street bank has not publicly commented on what it believes would be “fair” value for Sanyo’s shares, though some have speculated that the increasingly cash-strapped US firm may attempt to hold out for a price above Y200 per share.

Most investors took the initial rejection of the offer as a piece of pure negotiating strategy, and continue to price Sanyo shares on the footing that a deal will eventually be cobbled together. The same language — rejecting the new offer as “not fair” — was used by Goldman on Thursday when it decided not to accept Panasonic’s deal.

But today's rejection of Panasonic’s raised offer threatens to introduce new twists to the negotiations.

Goldman, with Japanese banks Daiwa Securites SMBC and Sumitomo Mitsui Banking, holds preferred shares that would, when converted, give the trio a combined 70 per cent stake in Sanyo.

The increasingly tense negotiations over Sanyo’s future have raised the possibility that Goldman might exercise a “right of first refusal” and buy preferred shares from Daiwa and Sumitomo at the same price being offered by Panasonic. Goldman Sachs said on Thursday that the move was among a number of options under consideration.

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