Toshiba has agreed to a $15.3 billion privatization

Toshiba will soon become a private company as a result of an expected deal
(photo: CC0 Public Domain)

The ongoing more than a year of attempts by the Japanese corporation Toshiba to retain its assets in safe hands may end up selling the shares to a consortium of investors, led by the JIP Fund, for $15.3 billion, according to sources Nikkei.

Toshiba’s board of directors has today accepted the buyers’ offer. The premium over Toshiba’s share price in the last trading session will be 9.6%, Bloomberg notes.

The 140-year-old Japanese corporation has long been pushed for a deal by activists among the institutional investors who own its stock. Until recently, two groups of investors, led by various Japanese investment funds, tried to fight for the right to buy Toshiba’s assets. The consortium led by Japan Industrial Partners (JIP) was the favourite.

The search for investors to match the shareholders’ desire to serve the national interest and the government of Japan was complicated by the presence of Toshiba’s nuclear assets. In part, Japanese authorities’ fears about control of strategically important assets were allayed by the willingness of about 20 Japanese companies to participate in the Toshiba privatization deal.

The current financial crisis has become an additional factor complicating the search for funds to finance the deal. An accounting fraud scandal in 2015 tarnished Toshiba’s reputation, the company later had to write off a $6.3 billion deal on its US energy assets, and by 2018 the flash memory business, now run by Kioxia , gained independence.

Toshiba itself was nearly delisted from the Tokyo stock exchange, and an attempt to restructure the company’s business last year met with resistance from shareholders who pushed for privatization.

By October, the privatization plan was approved with a preferred buyer a consortium led by JIP. This Japanese fund has already shaped the fortunes of Sony’s VAIO laptop business by buying it from its parent corporation in 2014. Now it looks like JIP will take over Toshiba’s fortunes as well.

As a result of the transaction, Toshiba will become a private company. A formal announcement of the acceptance of the terms of the deal should be made soon.

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