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CVC effectively withdraws buyout offer for Toshiba

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21 Apr 2021 01:04:26 GMT9
21 Apr 2021 01:04:26 GMT9

TOKYO: Toshiba Corp. said Tuesday that it has received a letter from British investment fund CVC Capital Partners stating the suspension of its acquisition offer for the Japanese electronics and machinery maker.

CVC effectively withdrew the acquisition offer as Nobuaki Kurumatani resigned as Toshiba president and CEO on Wednesday last week and the Toshiba management team strongly opposed the fund’s proposal to take the firm private, informed sources said. In the buyout proposal, CVC assumed that Kurumatani would continue to be the leader of the company.

The latest move by CVC is likely to affect the strategies of other investment funds that aim to acquire Toshiba, the sources said.

Toshiba received the letter on Monday. CVC said in a document, a copy of which was obtained by Jiji Press, that it has no intention to launch a tender offer for Toshiba without obtaining consent from the board of the company, suggesting that it is not considering a hostile bid.

CVC said in the letter that it would “step aside” to await Toshiba’s guidance as to whether its privatization will suit the “strategic objectives” of its management and board of directors.

The fund said it will continue to support Toshiba going private, adding that it is ready to keep talking with the Toshiba management.

Meanwhile, Toshiba said that the company cannot evaluate CVC’s preliminary acquisition proposal because it did not include concrete information, such as “the acquirer’s capital structure” and “specific management policies” after the acquisition.

CVC made the initial buyout proposal to Toshiba on April 6, claiming that Toshiba would be able to avoid interference from activist shareholders if it goes private. The fund was expected to submit a detailed proposal on Friday last week at the earliest.

Toshiba has expressed its opposition to CVC’s plan to take it private. “We are proud” to be able to return to the first section of the Tokyo Stock Exchange in January this year, three-and-a-half years after it was demoted to the TSE’s second section due to a business crisis, Toshiba said in a statement on Tuesday.

Toshiba also said it was regrettable that the initial buyout proposal from CVC caused “unwelcome volatility” in its stock prices.

JIJI Press

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