A consortium led by Japan Industrial Partners submitted a bid to buy Toshiba for $15 billion, but reportedly had no bank approval for the full price.
Toshiba’s ownership remains in doubt this week, after a consortium led by Japan Industrial Partners (JIP) made a 2.2 trillion yen ($15 billion) bid for the Japanese giant.
according to Reuters However, citing the Nikkei newspaper on Monday, the offer remains uncertain as it lacks major letters of commitment from banks, raising questions about whether it will be successful.
The $15 billion offer is in line with Toshiba’s market capitalization, and the takeover consortium is reportedly aiming to raise funding by the end of this month — if Toshiba accepts the offer.
The consortium is leading the bid for Toshiba, Japanese private equity group Industrial Partners (JIP), but is reported to also include ten other investors including utilities Chubu Electric Power and Orix financial services group.
Reuters reported that it was widely expected that JIP, previously selected by Toshiba as the preferred offer, had not submitted the firm offer that included bank commitments in time for a Monday deadline it had received from the company.
JIP’s plan to allow Toshiba’s current management to stay on after the takeover appears to have sparked concern among some major Japanese banks, whose financing is seen as critical to financing the deal, sources said.
The Nikkei reported that JIP, Chubu Electric and Orix will invest 100 billion yen each, without saying where it got the information. She added that a number of external funds chose not to join the proposal due to expectations of lower returns.
A Toshiba representative declined to comment to Reuters, saying the company could not “respond to information regarding candidates, including participating investors, as it could undermine the fair process.”
There is a chance that investors’ focus will now turn to another potential bidder, the state-backed JIC fund, which sources said is also a bid.
Sources have reported that JIC is in talks with US private equity fund Bain Capital and North Asia fund MBK Partners to form a separate consortium.
It should be noted that the state-backed JIP and JIC had previously cooperated in the first round of bids for Toshiba earlier this year, but then separated in the second round.
Toshiba is seeking a way forward after years of accounting and mismanagement scandals that began seven years ago.
Back in 2015, Toshiba was exposed to a major accounting scandal It faced delisting — a crisis that led to more than half of the company being owned by overseas shareholders, including active shareholders such as Elliott Management, Third Point and Farallon.
And this was the crisis that surrounded the conglomerate, and it tried many options to secure its future.
For example Toshiba Assets such as medical devices, personal computers, and consumer electronics were sold out and the US nuclear power unit, Westinghouse Electric, which declared bankruptcy in 2017.
In August 2021 started Talk to a number of private equity firms as she explores her future options.
Then in November last year Toshiba revealed plans to Divides itself into three separate companies.
The plan, which Toshiba hopes to complete by March 2024, will create a unit focused on infrastructure and another unit focused on electronic devices such as power semiconductors.
But Toshiba’s largest shareholder (Effissimo Capital Management), as well as an influential proxy advisory firm (Institutional Shareholder Services), in March 2022 They indicated their opposition to secession Veteran Japanese conglomerate.
That investor in March refused to agree to any of the Dissolution or reorganization proposals Provided by Toshiba management, the company was left with no clear way forward.
In April, Toshiba said it would do so Solicit bargain offers, including potential purchase.
It appears that there has been some interest.
In early June, Toshiba said it did Received eight bids and two bids for capital alliances That would see it still be a listed entity.
Later in June, Toshiba shareholders Agreed to add two members of the Board of Directors who are major active investorswhich added impetus to potential acquisition plans.
As Toshiba said earlier It will consider the possibility of privatizationalthough the company’s CEO insisted that the company would consider all options.
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