Toshiba receives $19B acquisition bid offer from local consortium

Toshiba Corp. is up for sale, and it reportedly received a huge bid offer of $19 billion or ¥2.8 trillion. The amount is said to be a 26% premium to the company’s closing price on Wednesday this week.

Toshiba chose a consortium of Tokyo-based group as its preferred bidder for the buyout. The news of the bid sent the company’s shares soaring on Thursday, Oct. 13. As per Fox Business, the company’s shares jumped by 7.5%, and this increase turned out to be the biggest one-day gain so far in more than a year.

The preferred bidder is a consortium led by Japan Industrial Partners Inc., a local private equity firm, and it includes Chubu Electric Power. It has been over a year since Toshiba Corp. started exploring strategic alternatives to save the company in the face of bankruptcy and other issues. In August 2021, the Japanese conglomerate was in talks with at least four investment firms, and last month, it received many letters from potential partners indicating their interest in a deal.

Kyodo News reported that the Japanese PEF firm asked a number of companies to invest in an effort to revive Toshiba Corp. It has approached Chubu Electric Power Co. and Orix Corp., and this was how the consortium was formed.

In any case, Japan Industrial Partners will need to secure several hundred billion yen for the possible buyout, and this is only a premium in addition to Toshiba's market cap of almost ¥2.2 trillion as of Tuesday. The consortium is said to be planning to fund about half of the price through loans from different financial institutions.

Late last month, Toshiba received several bids for restructuring plans from groups that passed the first round of bidding. The exact number of bidders was not revealed, but the potential buyers were narrowed down to two groups on Sept. 30, and these were the Japan Industrial Partners consortium and state-backed Japan Investment Corp.

Meanwhile, when contacted for details about the bidders, Toshiba only said, "We do not disclose information about bidders as doing so could disrupt the fair execution of the process."