The company said that a $14 billion tender offer to take Toshiba private is set to succeed on Wednesday, clearing the way for Japan’s most significant deal this year. The buyout, led by private equity firm Japan Industrial Partners (JIP), would end Toshiba’s 74-year history as a listed firm and put the electronics-to-power stations maker firmly in domestic hands after years of battles with overseas activist shareholders.
JIP’s tender offer, which ends on Sept. 20, requires two-thirds of Toshiba shares to be tendered for the bid to succeed. The offer price of 4,620 yen per share is higher than Toshiba’s earlier estimate, but JIP has argued that its proposal is the best option for the conglomerate.
The board of Toshiba approved the offer in March. It was the first major deal for the Japanese company in nearly a decade and a significant step to restore its global competitiveness. It has been battered by a series of crises, including accounting debacles, the bankruptcy of its U.S. nuclear power unit, and a governance scandal.
Toshiba’s stock has been in a slump since the planned buyout was announced, and its shares have remained at most 4,600 yen a share, reflecting investors’ uncertainty about whether the deal will succeed. A tender failure could lead to a prolonged period of upheaval for the firm, which has struggled to recover from an accounting scandal that saw books doctored for years.
One of the largest shareholders in the JIP-led group pursuing a takeover of Toshiba has requested to reduce its financial contribution, sources with knowledge of the matter said. The sources said that the move by financial services firm Orix will increase the chance that the group will need help meeting its funding obligations.
Toshiba’s board has backed the bid from JIP, valued at 2 trillion yen. Still, proxy advisory firm Institutional Shareholder Services has recommended that shareholders vote against it, saying it is not in the company’s best interests. The company’s chief executive, Taro Shimada, has urged shareholders to tender and support the transaction. He has also promised to return the company to stability and growth as it marks its 150th anniversary in 2023. “Our value is from creating what didn’t exist before,”.
