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Japanese entities may join CVC’s Toshiba buyout

The consortium is expected to launch a tender offer for the Japanese electronics and machinery giant as early as July for a delisting in October. (Shutterstock)
The consortium is expected to launch a tender offer for the Japanese electronics and machinery giant as early as July for a delisting in October. (Shutterstock)
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10 Apr 2021 03:04:23 GMT9
10 Apr 2021 03:04:23 GMT9

TOKYO: British investment fund CVC Capital Partners is looking to form a consortium with Japanese entities including public-private fund Japan Investment Corp. for its offer to buy Toshiba Corp., it was learned Friday.

The consortium is expected to launch a tender offer for the Japanese electronics and machinery giant as early as July for a delisting in October.

Going private is expected to allow Toshiba to shut out activist shareholder interference in its management. That will make it easier to boost Toshiba’s corporate value before an anticipated relisting.

Also expected to be part of the consortium is the government-held Development Bank of Japan. CVC has started approaching Japanese entities about joining the deal.

In its initial proposal, submitted to Toshiba on Tuesday, CVC offered to buy the company at 5,000 yen per share, about 30 pct above the recent market price, for a total of 2.3 trillion yen.

CVC hopes to form a consortium to make it easier to secure the funds for the huge buyout. In addition, participation of Japanese organizations is expected to allay Japanese government concerns over transfer of Toshiba’s technologies and trade secrets to foreign countries.

The Toshiba board said Friday that it is not involved in drawing up CVC’s offer and that it will conduct a “careful review” of the bid after it is further clarified.

“The proposed transaction is not contemplated to be financed by CVC alone,” a statement by the board’s chairman, Osamu Nagayama, said, adding that the British fund plans to seek financing assistance from other investors and financial institutions.

The statement also said that the financing process is expected to require “a substantial amount of time” and involve “complexity.”

CVC is expected to submit a detailed proposal soon, after which Toshiba will begin fully considering the offer.

Toshiba will set up a special team led by Corporate Senior Executive Vice President Masayasu Toyohara to study the conditions and impacts of the deal.

President Nobuaki Kurumatani, who previously served as chairman of CVC’s Japanese arm, and outside director Yoshiaki Fujimori, who is currently CVC Japan’s senior executive adviser, will not be involved in the process due to conflict-of-interest concerns.

JIJI Press 

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