Toshiba is considering a buyout offer from a British equity fund, with the deal reportedly worth about $ 20 billion (approximately 1.47,040 kroner).
Trade with Toshiba the shares were suspended on the Tokyo Stock Exchange in the open after the Japanese company confirmed the offer in a statement.
Toshiba said it “received an initial offer yesterday” from Partners of CVC Capital for redemption.
“We will request detailed information and discuss the offer carefully,” the company added.
The Nikkei said CVC was considering a 30 percent premium to the current share price of the Japanese industrial group, valuing the deal at nearly 2.3 trillion yen (approximately 1.54,625 kroner) based on Tuesday’s close.
The financial daily said CVC would consider hiring other investors to participate in the buyout. CVC declined to comment.
The proposal will take Toshiba for granted, with the delisting aimed at leading to faster decision-making by Toshiba’s management, which has recently clashed with shareholders, the statement said.
The move, if successful, will allow the company to focus its resources on renewable energy and other core activities, the reports added.
The two companies are no strangers – Toshiba CEO and President Nobuaki Kurumatani was the head of CVC’s Japanese operations between 2017 and 2018, before taking the top job in the conglomerate.
A senior executive at CVC Japan is currently an outside director on Toshiba’s board.
Kurumatani told reporters that “we have received the proposal, but we will discuss it at a board meeting.”
According to reports, discussions will begin on Wednesday, although Toshiba did not specify immediately.
Toshiba has been hit by fake accounting scandals and huge losses associated with the US nuclear bloc. It was forced to sell its chip unit at a profit to make up for the huge losses.
After a painful restructuring, its profits recovered and in January the company returned to the prestigious first section of the Tokyo Stock Exchange.
Justin Tang, head of Asian research at United First Partners, said CVC’s performance on Toshiba’s board meant the fund was already “familiar with Toshiba’s assets as well as its internal work.”
“Given Toshiba’s turbulence, favorable interest rate environment and supportive investors, the situation is right on the alley of CVC with their experience in restructuring and overcoming,” he told AFP.
“However, they will have a job for them in terms of regulatory approvals,” Tang warned.
The spokesman for the Japanese government, Katsunobu, stressed the importance of due diligence given Toshiba’s large presence in Japan.
“Regarding the companies that are important for the society and the economy of our country, we believe that it is crucial for them to be able to build and maintain a management system that allows them to continue stable operations,” he said.
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