July 7, 2022

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Toshiba shares rise as conglomerate opens door to landmark take-private deal

2 min read

Shares in Toshiba jumped as much as 3 per cent higher on Friday after the Japanese conglomerate said it would set up a special committee to assess potential bids from private equity and other investors, opening the door for a landmark deal to take one of the country’s biggest industrial names private.

The committee is likely to receive its first deal proposal from Bain Capital, the US private equity firm that last week secured qualified support for a buyout deal from Toshiba’s largest shareholder, Singaporean investment fund Effissimo.

People close to the situation said Bain’s preparations for a bid were in an advanced stage, but they also noted the significant political and technical challenges of taking private a 146-year-old brand whose business areas stretch from infrastructure and refrigerators to nuclear power and defence.

People close to several big PE funds likely to be involved in discussions with Toshiba said that, given the sensitivity around some of its core businesses, any buyout deal hoping to succeed would need a significant Japanese contingent among its investors.

People close to Toshiba said that while there were stark divisions on the matter within the company, a growing number of senior figures had concluded that a take-private deal might provide the best route for the company to resolve years of business turmoil and deepening deadlock with activist shareholders.

The announcement by Toshiba, which has a market value of around $17bn, came late on Thursday night. It follows a sharp ratcheting up of pressure for such a move from big investors and a letter sent on Wednesday to the Toshiba board by the company’s second-largest shareholder, 3D Investment Partners.

The decision by Toshiba’s board of directors fires the starting gun on what the company’s more vocal investors hope will be a spirited battle between rival investment consortiums. A strategic review committee convened last year discussed potential buyout deals with a list of…

2022-04-07 20:20:46

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