Thu, 07 Dec 2023

JIP's $14 billion takeover bid to privatize Toshiba a success

Robert Besser
24 Sep 2023, 19:55 GMT+10

TOKYO, Japan: This week, Toshiba revealed that a tender offer worth US$14 billion from Japan Industrial Partners (JIP) was a success.

The deal with the private equity firm will pave the way for the embattled industrial conglomerate to go private.

After it tendered 78.65 percent of shares in the 148-year-old electronics-to-power stations maker, the JIP-led consortium now has a majority of more than two-thirds, which would enable it to buy out other shareholders.

After the deal, Toshiba is back in domestic hands after years of battles with overseas activist investors and could be delisted as early as December.

Analyst Travis Lundy of Quiddity Advisors, who publishes on Smartkarma, said, "Activist shareholders and Toshiba were stuck with each other for years. This takeover allows both sides to escape their mutual bearhug."

"I expect the prospect of management and new ownership alignment will improve morale. However, to succeed, management needs to be able to tell a better story to investors coming out of this," Lundy added.

Its complex relationships with various stakeholders, including shareholders with different opinions, have negatively affected its business operations, and a stable shareholder base would help it pursue its long-term strategy centered on high-margin digital services, Toshiba said.

Since 2015, Toshiba has been hit by accounting and corporate governance scandals, suffered heavy losses, and came close to delisting.

JIP's consortium includes 20 Japanese companies, led by chipmaker Rohm, financial services firm Orix, and Chubu Electric Power.

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