Olympus weighs capital alliance vs. going it alone

Japan's Olympus ($OCPNY), which is known for its diagnostic endoscopes, among other devices, has been having a tough year. It's battled a $1.7 billion scandal surrounding accounting irregularities, as well as the upcoming ouster of its entire board. While analysts have speculated what's next for the company, reports are surfacing that Olympus might ride the wave of the scandal alone without the help of additional investors.

Word of the potential plan comes as the company received capital alliance offers from Sony, Fujifilm Holdings and Terumo, Bloomberg reports. If they came to pass, such offers could help bolster the company's sagging reputation in the eyes of investors.

"There's nothing wrong with the company's main business," said Ichiyoshi Investment Management's Mitsushige Akino, as quoted by Bloomberg. "Still, it needs to restore investor confidence before it can raise funds from the market. The fastest and easiest way to boost capital is forming an alliance."

But in an interview quoted by Reuters, Hiroyuki Sasa, who was nominated to take over the company this month, said his company may not have to enter an alliance. "Strengthening capital through our own efforts is among the options ... though we are considering all options," he said. However, he did confirm that those three companies--as well as others--made overtures. As Bloomberg noted, he declined to identify other interested parties.

Problems for the Japanese company surfaced last year after former head Michael Woodford brought the accounting irregularities to light and was summarily fired. The company eventually admitted that it had hidden the $1 billion-plus of losses over roughly two decades. Olympus shares have fallen about 47% since the company fired Woodford, according to Bloomberg.

Still, Olympus isn't lying down in the face of the scandal. Late last month, the company showed off three high-profile medical products, launching for overseas markets a refreshed gastrointestinal video endoscopy system, a low-cost endoscopic videoscope system and blood vessel sealing and tissue cutting devices.

- check out the Bloomberg story
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