Toshiba is considering an offer to take over a UK private equity fund, he said on Wednesday, with reports suggesting the deal could be worth around $ 20 billion (£ 14.50).
Trading in Toshiba shares was halted on the Tokyo Stock Exchange upon opening, after the Japanese company confirmed the offer in a statement.
Toshiba said it “received an initial offer yesterday” from CVC Capital Partners for a takeover.
“We will ask for detailed information and will carefully discuss” the offer, the firm added.
the Nikkei The newspaper said CVC was considering a 30% premium to the Japanese industry group’s current share price, valuing the transaction at nearly 2.3 trillion yen ($ 20.8 billion) based on Tuesday’s closing.
The financial daily said CVC would consider recruiting other investors to participate in the buyout. CVC declined to comment on the matter.
The proposal would make Toshiba private, with the delisting intended to speed up decision-making by Toshiba management, which recently clashed with shareholders, according to reports.
The move, if successful, would allow the company to focus its resources on renewables and other core businesses, the reports added.
The two companies are no strangers – Toshiba chief executive and chairman Nobuaki Kurumatani headed CVC’s Japanese operations between 2017 and 2018, before taking on the role of conglomerate leader.
And a senior executive from CVC Japan is currently an outside director on Toshiba’s board of directors.
Kurumatani told reporters that “we have received the proposal but we will discuss it at a council meeting.”
Reports suggested discussions would begin on Wednesday, although Toshiba did not immediately clarify.
“Work cut” for approval of bids
Toshiba has been hit by bogus accounting scandals and huge losses related to its US nuclear unit. He was forced to sell his chip unit for profit to make up for huge losses.
After a painful restructuring, its profits rebounded and the company returned in January to the prestigious first section of the Tokyo Stock Exchange.
Justin Tang, head of Asian research at United First Partners, said CVC’s representation on Toshiba’s board of directors meant the fund was already “familiar with Toshiba’s assets as well as its inner workings.”
“Given the turbulence at Toshiba, the favorable interest rate environment and favorable investors, the situation is very appropriate for CVC with its expertise in restructuring and turnaround,” he said. to TBEN.
“However, they will have their work cut out for them when it comes to regulatory approvals,” Tang warned.
Japanese government spokesperson Katsunobu Kato stressed the importance of due diligence given Toshiba’s large presence in Japan.
“With regard to companies that are important to society and the economy of our country, we believe it is crucial that they can build and maintain a management system that allows them to continue stable operations,” said he declared.