Image: Reuters Berita 24 English - Three people with knowledge of the situation told Reuters that bidders for Toshiba Corp are considering...
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| Image: Reuters |
Berita 24 English - Three people with knowledge of the situation told Reuters that bidders for Toshiba Corp are considering giving up to 7,000 yen ($51.41) per share to take the struggling Japanese conglomerate private, valuing the deal at roughly $22 billion.
Toshiba, which is considering its options, reported last month that it has received two capital alliance bids that would keep it listed as well as eight initial buyout proposals.
According to the persons, the bidders and Toshiba's shareholders are currently debating an offer price range of up to 7,000 yen per share, which would represent up to a 27 percent premium over Toshiba's share price of 5,501 yen as of Wednesday's close.
A other source claimed that numerous conditions have been connected to the large range of offers.
Early on Thursday, Toshiba stock increased by 5.3 percent in Tokyo, outpacing the benchmark Nikkei average's gain of 0.8 percent.
Upon finalisation of the offer price, the conglomerate that manufactures everything from electronics to nuclear reactors would be valued at a maximum of 3 trillion yen ($22 billion).
According to Toshiba, it would not reveal any specifics about the ideas.
According to the persons, initial bids have been placed by KKR & Co Inc, Baring Private Equity Asia, Blackstone Inc, Bain Capital, Brookfield Asset Management, MBK Partners, Apollo Global Management, and CVC Capital Partners.
They indicated that some of them might join coalitions to submit a bid.
Refusing to comment were Bain, Blackstone, Brookfield, Baring, CVC, KKR, and MBK. An inquiry for comment was not immediately answered by Apollo.
They declined to be identified because they were not authorised to speak to the media, but domestic funds, notably Japan Investment Corp (JIC), and a number of strategic players are looking to see how they may participate in the sale.
JIC chose not to respond.
WEAK JPY
If accomplished, the Toshiba sale would be the largest buyout in Japan since Kioxia, a conglomerate's memory chip arm, was taken private by a Bain-led group for $18 billion in 2018.
The negotiations are taking place as the Japanese economy is still plagued by a weak yen, which threatens to derail business plans for Japanese companies and make them desirable takeover targets for foreign investors.
Early on Wednesday, the yen fell to a new 24-year low of 136.71 per dollar.
According to two of the sources, Bain has been "extremely active" in its pursuit of a buyout among all potential bidders.
Even at 6,500 yen per share, according to a Japanese investment banker with knowledge of the deal, the valuation for Toshiba seemed "extremely stretched."
The price will ultimately depend on how investors see Toshiba's 40% ownership of the unlisted chipmaker Kioxia, he said.
That offered Bain an advantage over other bidders, he claimed, as the private equity company held the majority of Kioxia and would thus determine the fate of the chipmaker, which would have an effect on Toshiba's valuation.
After shareholders rejected a management-supported restructuring plan, Toshiba, which has been plagued by accounting and governance difficulties since 2015, established a special committee in April to gather suggestions.
The business had stated that after its annual shareholders meeting on June 28, it would shortlist potential bidders for further investigation.
($1 = 136.1500 yen)
