Toshiba shares up as buyers prepare to shell out $22b
Japanese tech conglomerate has reportedly received 10 offers, each with a different idea about how to do things
Toshiba has received 10 potential offers for the company, eight of which would take the company private, while two would allow it to remain publicly listed, according to reports.
Toshiba shares are said to have risen as much as 6.5 percent following the news, with some estimates valuing the deals at up to $22 billion.
The Japanese conglomerate announced in April that it was considering proposals to take the company private following numerous scandals and pressure from investor groups.
Now Reuters reports that 10 bidders are discussing price ranges up to ¥7,000 a share with Toshiba shareholders, citing anonymous sources, which would be as much as a 27 percent premium on top of Toshiba's current share price. This would result in the deal valuing Toshiba at ¥3 trillion ($22 billion), sitting at the top end of earlier estimates.
Toshiba declined to disclose any details of the proposals, but the company's annual meeting of shareholders is scheduled for early next week – June 28 – and it is likely that more information will be made public at that point.
Earlier reports indicated that potential investors interested in buying some or all of Toshiba included Bain Capital, currently the largest stakeholder in Kioxia, CVC Capital Partners, and KKR.
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According to Reuters, there was a broad range of different price offers and conditions attached among the various bidders, as would be expected. There is speculation that some of these conditions may require parts of Toshiba to be spun out, as happened with the company's memory manufacturing business, which has now become Kioxia.
Toshiba announced it was considering proposals for a sale to take the business private following pressure for a reorganization from major shareholders such as 3D Investment Partners, which owns 7.6 per cent, and Effissimo Capital Management. 3D Investment Partners went as far as describing Toshiba as "a corporate governance embarrassment for Japan" in an open letter to the company.
Earlier plans from the Japanese giant had been for it to split itself into three separate companies; one providing infrastructure services, one focused on printers and point of sale kit, and another that would comprise Toshiba's semiconductor and hard disk drive businesses. This move was opposed by 3D Investment Partners, however.
At last year's shareholder meeting, investors voted to remove Toshiba's chairman, Osamu Nagayama, and a member of the company's audit committee over allegations that Toshiba had conspired with the Japanese government to minimize the influence of foreign investors. ®