Toshiba confirms CVC buyout offer

TOKYO, 7 April 2021:

Toshiba shares gained up to 8% at the start of trading at the Tokyo Stock Exchange today after its president confirmed the Japanese technology company has received a buyout offer from investment fund CVC Capital Partners.

Shortly before the end of the first hour, the Tokyo Stock Exchange suspended trading in Toshiba’s shares – after its president and chief executive officer Nobuaki Kurumatani confirmed the offer, reported earlier by economic daily Nikkei.

The company will discuss the offer at a board meeting, scheduled to be held later today.

CVC was considering offering a 30% premium over the current price of the Japanese group’s shares, which would put the value of the deal at almost ¥2.3 trillion (US$20.9 billion), according to Nikkei.

The investment fund is also considering recruiting other investors to participate in the acquisition.

The proposal would help Toshiba accelerate decision-making amid complaints from some shareholders as it tries to recover from a series of scandals and heavy losses in recent years.

In March, Toshiba shareholders voted in favour of a proposal by Singaporean fund Effissimo Capital, its largest shareholder, to launch an independent investigation into the legitimacy of the company’s top leadership after denouncing irregularities in the vote to re-elect Kurumatani.

The offer would limit such conflicts by leaving the company in the hands of a single shareholder.

Kurumatani, the first head in 53 years to be appointed from outside the company, was vice chairman of the Sumitomo Mitsui Financial Group before becoming chairman of CVC Asia Pacific Japan, the Japanese branch of CVC Capital Partner.

For the deal to go through, it would need approval from the Japanese regulator. The finance ministry would have to review the offer in advance, by virtue of the regulations implemented in 2020 that impose greater scrutiny of foreign investment in certain types of businesses.

Toshiba has been embroiled in a series of accounting scandals in recent years, which has drawn rebukes from Japanese regulators.

Its financial woes have led it to withdraw from a nuclear power plant in the US and offload its semiconductor subsidiary, once the most profitable division of the company.

– EFE