Toshiba’s $14 Billion Tender Offer Ends in Success, Clears Path to Going Private
TOKYO, Sept 21 (Reuters) – Toshiba announced on Thursday that a $14 billion tender offer from private equity firm Japan Industrial Partners (JIP) had successfully concluded, marking a significant milestone for the embattled industrial conglomerate’s plan to go private.
The JIP-led consortium received 78.65% of Toshiba shares tendered, surpassing the two-thirds majority requirement, which allows the group to squeeze out any remaining shareholders.
This deal effectively puts Toshiba, a 148-year-old electronics-to-power stations maker, in the hands of domestic investors after years of battles with overseas activist shareholders. Delisting is expected to occur as early as December.
“Activist shareholders and Toshiba were stuck with each other for years. This takeover allows both sides to escape their mutual bearhug,” remarked analyst Travis Lundy of Quiddity Advisors, who publishes on Smartkarma.
Toshiba had accepted the buyout offer valuing the company at 2 trillion yen ($13.5 billion) in March. While some shareholders expressed dissatisfaction with the price, Toshiba defended its decision, stating that there was no prospect of a higher offer or competing bid.
“We are deeply grateful to many of our shareholders for being understanding of the company’s position,” said Toshiba Chief Executive Taro Shimada in a statement on Thursday. He added, “Toshiba will now take a major step toward a new future with a new shareholder.”
Toshiba has long struggled with complex relationships with various stakeholders, including shareholders with conflicting opinions. The company believes that having a stable shareholder base will support the pursuit of its long-term strategy focused on high-margin digital services.
JIP plans to retain CEO Taro Shimada, a move that is expected to improve morale within the company. However, analyst Travis Lundy commented, “To succeed, management needs to be able to tell a better story to investors coming out of this.”
Although JIP is not well-known overseas, the firm has been involved in corporate carve-outs and spin-offs from other Japanese conglomerates, such as Olympus’s camera business and Sony Group’s laptop computer business.
Since 2015, Toshiba has faced accounting scandals, heavy losses, and near-delisting. The company has also been embroiled in several corporate governance scandals.
JIP’s consortium includes 20 Japanese companies, primarily led by chipmaker Rohm, financial services firm Orix, and Chubu Electric Power.
The Toshiba-JIP deal is expected to be the largest M&A deal in Japan this year. According to LSEG data, Japan is the only major market in Asia that has seen growth in mergers and acquisitions for the year to date.
Private equity deals have been particularly active in Japan, including the planned $6.4 billion buyout of materials maker JSR by a government-backed fund.
($1 = 148.3000 yen)
Reporting by Makiko Yamazaki; Editing by Edwina Gibbs
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