In a significant development for the embattled industrial conglomerate, Toshiba (6502.T) confirmed on Thursday that the $14 billion tender offer from private equity firm Japan Industrial Partners (JIP) has concluded successfully. This deal marks a pivotal moment that sets the stage for Toshiba’s transition into a private entity.
The consortium led by JIP achieved an impressive 78.65% of Toshiba shares tendered, securing a majority exceeding two-thirds of the shares, a substantial portion that enables them to buy out any remaining shareholders.
This transaction signifies a shift towards domestic ownership for Toshiba after enduring years of confrontations with foreign activist shareholders.
Toshiba initially accepted the buyout proposal in March, valuing the industrial conglomerate at 2 trillion yen ($13.5 billion). While some shareholders expressed dissatisfaction with the offered price, Toshiba contended that there were no prospects of a superior offer or competitive bid.
Expressing gratitude to shareholders for their understanding, Toshiba Chief Executive Taro Shimada stated in a Thursday announcement, “We are deeply grateful to many of our shareholders for being understanding of the company’s position.” He added, “Toshiba will now take a major step toward a new future with a new shareholder.”
Toshiba has cited its intricate relationships with diverse stakeholders, including shareholders with differing opinions, as hindrances to business operations. A more stable shareholder base is expected to facilitate the company’s pursuit of its long-term strategic objectives.
Although Japan Industrial Partners may not be widely recognized internationally, it has been actively engaged in corporate carve-outs and spin-offs from prominent Japanese conglomerates. Examples include its involvement in Olympus’ (7733.T) camera business and Sony Group’s (6758.T) laptop computer business.
JIP intends to retain CEO Shimada and his existing management team as part of the ongoing transition.
Toshiba’s journey has been marred by accounting scandals, substantial losses, and the threat of delisting since 2015. The company has also grappled with various corporate governance controversies.
The JIP-led consortium is comprised of 20 Japanese companies, spearheaded by chipmaker Rohm (6963.T), financial services firm Orix (8591.T), and Chubu Electric Power (9502.T).
(Conversion rate: $1 = 148.3000 yen)
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