Toshiba’s board of directors decided to accept the JIP-led consortium’s takeover proposal. The JIP consortium, which was selected as the preferred bidder in October last year, proposed to Toshiba that it would acquire its entire stake for 2.2 trillion yen next month. Excluding the 200 billion yen raised by Toshiba, the actual acquisition price is 2 trillion yen.
The deal will help increase corporate value, Toshiba said. “The deal will create a stable foundation for the company to grow and change by implementing consistent business strategies and integrating shareholder support in the mid- to long-term.”
JIP plans to implement a tender offer in late July after going through the approval process of competition authorities in each country. The tender offer price is 4,620 yen per share. It is about 10% premium to the closing price of 4,213 yen on the 23rd. JIP plans to delist Toshiba through public purchase, increase its corporate value, and re-list it.
Toshiba, whose business began in 1875, was once a representative company of Japan to the extent that it was called “Japan’s Pride.” Toshiba introduced laptops and NAND flash memory semiconductors for the first time in the world. However, the noise continued after the accounting fraud scandal broke out in 2015. At that time, Toshiba’s credibility declined after it was found to have inflated profits for seven years until 2014, and since then, it has fallen into a serious management crisis due to large losses at Westinghouse, a subsidiary of the U.S. nuclear power plant.
Toshiba conducted a similar capital increase worth 600 billion yen for the second consecutive year in 2017 to prevent delisting due to capital erosion, and management strategies have since been influenced by activist funds that led the capital increase. Conflicts between the company and shareholders surfaced over the operation of the general shareholders’ meeting and the appointment of directors, and management had to pour huge amounts of money into shareholder returns to ease shareholders’ opposition. The group split plan to enhance corporate value was stranded due to opposition from shareholders. Toshiba, which faced difficulties, later turned to a public offering of reconstruction plans, including delisting.