Toshiba accepts $15.3b buyout bid from Japanese consortium

BLOOMBERG 

Toshiba Corp accepted a buyout offer from a Japanese consortium, according to people familiar with the matter, as the iconic conglomerate moved a step closer to ending a troubled chapter in its more-than-140-year history.
The Tokyo-based company’s board approved a bid of about 2 trillion yen ($15.3 billion) from a group led by domestic private equity firm Japan Industrial Partners Inc, said one of the people, who asked not to be identified as the information is private. The offer is at about a 9.6% premium to Toshiba’s closing price on Thursday. An announcement could come soon, the person said.
The Nikkei newspaper first reported Toshiba’s acceptance of the offer. About 20 Japanese companies, including Orix Corp, Rohm Co and Chubu Electric Power Co, will participate in the buyout, the Nikkei said, confirming earlier Bloomberg News reports.
The move could bring down the curtain on years of turbulence at the storied Japanese firm after a series of scandals plunged it into difficulty and set it on the path to a sale.
Toshiba’s management, the Japanese government and the company’s large proportion of vocal foreign shareholders have been at odds over the company’s future, with activist investors seeking to maximise returns while the state prioritised keeping sensitive technologies and businesses out of foreign hands.
“Having a resolution here would be a positive, as one of the issues for Toshiba has been a lack of a consistent strategy due to the constant changes of direction,” said Mio Kato, an analyst at LightStream Research.
The saga has become a test case for corporate governance in Japan as a list of prominent activist investors saw an opportunity and took stakes in the company. They included billionaire Paul Singer’s Elliott Management Corp, Seth Fischer’s Oasis Management Co and Singapore-based funds Effissimo Capital Management Pte and 3D Investment Partners Pte. And some of the world’s biggest private equity firms considered making buyout offers, including Bain Capital, CVC Capital Partners and KKR & Co.
Toshiba’s nuclear power business is deemed important to national security. It’s involved in decommissioning the Fukushima Dai-Ichi atomic power plant, which was wrecked in the earthquake, tsunamis and nuclear meltdowns of 2011. That made it hard for the government to accept a transfer of ownership to an overseas firm.
If the sale goes through, it will be one of the largest Asian transactions this year at a time when deal volumes have plunged. It will also be one of the biggest ever private equity-led buyouts in Japan.
Toshiba has lurched from one disaster to another over the past eight years, starting with an accounting scandal in 2015 that devastated profits and led to a company-wide restructuring.