Toshiba has announced the initiation of its previously declared plan to privatise the struggling Japanese conglomerate, in a transaction valued at approximately $14 billion.
This move follows a series of turbulent years for the company. In the past, Toshiba once symbolised Japan’s economic prowess, but more recently it has been entangled in controversies, financial difficulties, and leadership changes.
According to reports, the consortium led by Japan Industrial Partners, which will take over control through the nearly $14 billion (JPY 2 trillion) agreement, comprises 17 Japanese enterprises and six Japanese banks.
Toshiba had indicated that if the consortium fails to acquire a minimum of 66.7 percent of the outstanding shares, the tender offer, announced in March, would be terminated.
The offer price is established at $32.28 (JPY 4,620) per share, with a 30-business-day window, as indicated on the tender offer website. This price is slightly above Monday’s closing rate of $32.03 (JPY 4,584).
In its recent, Toshiba disclosed a net loss of $176.75 million (JPY 25.3 billion) for the initial quarter, attributed to reduced demand at chip manufacturer Kioxia, in which Toshiba holds a 40 percent stake.
Two years ago, the company faced uncertainty due to a substantial buyout proposal from private equity firm CVC Capital Partners. The subsequent abandonment of the CVC offer prompted discussions about splitting the company and divesting its device segment, a move met with resistance from certain investors.
Although Toshiba grew into a sprawling conglomerate, it has been in a state of turmoil since a profit-inflation scandal in 2015. Subsequently, it encountered significant losses at its American nuclear subsidiary, followed by a recovery that led to pressure from newly engaged activist shareholders.
