Toshiba Accepts Buyout Offer from JIP
17:48 JST, March 23, 2023
Toshiba Corp. accepted on Thursday a buyout offer from a group led by domestic private equity firm Japan Industrial Partners Inc. (JIP), aiming to restructure its management by going private.
Toshiba’s special committee of outside directors took a position in favor of the JIP proposal and decided at an extraordinary meeting of the board of directors on Thursday to accept it.
JIP will launch a takeover bid after receiving approval from the relevant authorities and other procedures.
The JIP group made a final proposal in February for a restructuring package that would take Toshiba shares private through a takeover bid.
The total amount of funds for the buyout is about ¥2 trillion. The plan is to procure about ¥1.4 trillion in loans from megabanks and other banks, including a ¥200 billion line of credit, and an investment of about ¥1 trillion from about 20 companies with which Toshiba has close business relationships.
In 2017, Toshiba fell into excessive debt due to deteriorating business conditions and was demoted to the former Second Section of the Tokyo Stock Exchange. To avoid being delisted, the company received a capital increase of ¥600 billion from influential shareholders. After returning to the former First Section in 2021, the then president resigned over a proposed takeover by a British investment fund.
A proposed split-up of the company was rejected at an extraordinary shareholders’ meeting in March 2022. In April, Toshiba publicly solicited a takeover proposal that included delisting, and the JIP received preferential negotiating rights.
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