Toshiba has struggled in recent years and is now exploring strategic options. The company said this month that it had received eight preliminary acquisition proposals and two capital alliance proposals, the latter of which would maintain Toshiba’s public company status.
According to people familiar with the matter, the bidder is currently discussing with Toshiba shareholders the highest offer of 7,000 yen per share, which is a 27% premium over Toshiba’s closing price of 5,501 yen on Wednesday. Another source said the different bidders had made a wide range of bids, with various conditions attached.
Toshiba shares were not traded in Tokyo on Thursday, pressured by a flood of buying orders. At 7,000 yen per share, Toshiba would be valued at 3 trillion yen ($22 billion).
Toshiba said it would not disclose the specifics of these plans.
The bidders who have submitted preliminary offers include KKR, Baring Asia, Blackstone Group, Bain Capital, Brookfield Asset Management, MBK Partners, Apollo Global Management and CVC Capital, the sources said. Some of these bidders may form a consortium to bid. In addition, Japanese domestic funds, including Japan Investment Corporation, and many other strategic investors are also paying attention to how they can participate in the transaction.
If the deal goes through, it would be the largest takeover in Japan since a Bain-led consortium took Toshiba’s memory chip business Kioxia private for $18 billion in 2018.
The recent weakness in the yen is plaguing the Japanese economy, potentially affecting the business plans of Japanese companies and making them attractive acquisition targets for foreign buyers. The yen hit a 24-year low against the dollar earlier on Wednesday.
Of all the potential bidders, Bain has been “very aggressive”, two people familiar with the matter said.
Another Japanese investment banker with knowledge of the deal said that even at 6,500 yen per share, Toshiba’s valuation appeared to be “excessive.” Ultimately, the price must take into account that Toshiba also holds a 40% stake in unlisted Kioxia, he said. As a result, Bain has an advantage over other bidders because Bain holds a majority stake in Kioxia, which can determine the chip company’s fate and, in turn, Toshiba’s valuation.
Toshiba has been plagued by accounting problems and a corporate governance crisis since 2015. Toshiba formed a special committee in April to evaluate other options after shareholders voted against a restructuring plan backed by management. The company earlier said it would finalize a shortlist of bidders and conduct due diligence after its annual general meeting on June 28.
