Toshiba Accepts $15 Billion Buyout Offer from Private Equity Group


What just happened? Toshiba has accepted a buyout offer from a consortium led by Japan Industrial Partners (JIP) that will make the Japanese tech giant private. The deal, which was approved by Toshiba’s board of directors on Thursday, is valued at 2 trillion yen (about $15.3 billion) or 4,620 yen ($35.43) per share and represents a 9.7% premium over Thursday’s closing price of 4,213 yen.

Toshiba has a legendary history that dates back to the late 1800s. The company has successfully established itself as a global electronics giant for many years, but since a major accounting scandal rocked the company in 2015, it has faced serious difficulties.

The Japanese tech giant has taken several steps to try to rectify the situation, including cutting almost 8,000 jobs and selling several divisions. Toshiba sold its image sensor division to Sony, transferred its television business to Hisense, parted with the memory chip business and officially withdrew from the PC market.

Sources familiar with the situation told Reuters that about 20 Japanese companies, including Chubu Electric Power and chip maker Rohm Co., plan to participate in the buyout. According to Refinitiv, if successfully completed, the transaction will become the third largest merger/acquisition in the world this year.

Toshiba’s stock price has fallen more than 11 percent over the past year, but is up about 4.2 percent at the time of this writing.

The JIP bid was the only complete offer received during Toshiba’s one-year competitive auction. Toshiba put forward eight proposals in the first wave, along with two capital pooling proposals, but according to sources, only four proposals made it through to the second round.

Analyst Travis Lundy of Quiddity Advisors told Reuters that the deal ends months of uncertainty as to whether a deal has been struck. The price may disappoint, Lundy noted, but at least this is an exit for active investors.

As we have been informed, JIP is due to submit a tender offer at the end of July.


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