Japanese Firms at Helm of Buyout Plan for Troubled Toshiba

As the scandal-tainted Japanese electronics and energy behemoth strives to recover, Toshiba on Monday unveiled a 2 trillion yen ($14 billion) tender offer that would take the company private.

The tender offer, which is being spearheaded by Japan Industrial Partners, a buyout group of significant Japanese banks and corporations, begins on Tuesday and is priced at 4,620 yen ($32) per share.

The idea, according to Toshiba Corp.’s chairman Akihiro Watanabe, is the only way for the company to regain its former strength. Watanabe urged shareholders to support it.

With sales of 704 billion yen ($5 billion), down roughly 5% from the prior year, Tokyo-based Toshiba also posted a 25 billion yen ($176 million) loss for the April-June quarter.

It cited uncertainty in its computer chip sector as the reason it did not provide a full fiscal year earnings prediction.

If accepted, the proposal will mark a significant development in Toshiba’s multiyear turnaround attempt and open the door for its delisting from the Tokyo Stock Exchange.

For the bid to be successful, the shares of at least two-thirds of the shareholders must be offered. Many of the activist foreign investors who control Toshiba’s shares have voiced their displeasure with the offer.

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Buyout Deal and Continued Fukushima Assistance

The Toshiba board gave its approval to the arrangement in March.
The acquisition would maintain Toshiba’s partnership with its Japanese allies. The 2002-founded Japan Industrial Partners has invested in several Japanese corporations, including Sony, Hitachi, and Olympus.

The tsunami that struck northeastern Japan in March 2011 and caused three reactors at Fukushima to melt down also affected Toshiba, a significant producer in the country’s nuclear industry.

The decommissioning process at Fukushima Dai-ichi, which is anticipated to take decades, is being assisted by Toshiba. Westinghouse, the U.S. nuclear division, declared bankruptcy in 2017 following years of significant losses due to rising safety expenses.

Once valued for its home appliances, laptops, batteries, and computer chips, the Toshiba brand came under attack from foreign activist shareholders.

In 2015, a massive accounting scandal involving records that had been altered for years severely damaged its reputation.

With businesses who had maintained close economic ties with Toshiba wanting to invest, Toshiba insisted that the most recent offer was “fair and reasonable” and made managerial sense.

CEO Taro Shimada claimed it would bring stability to Toshiba, noting that the company will celebrate its 150th birthday in a few years.

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Source: US News