Japanese Government-Backed Funds Consider Bidding for Toshiba

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TOKYO (Reuters) – Japan Investment Corp (JIC) and Norinchukin Bank are considering buying Toshiba Corp, the Nikkan Kogyo Shimbun reported on Thursday, a Japan-led bid which may be more palatable to regulators and management than rival bids by foreign funds.

Private equity fund CVC Capital Partners, which has already made a preliminary bid for Toshiba, may join the government bid to take the conglomerate private, but the Japanese funds would lead the transaction, the newspaper said.

The newspaper said other government-affiliated funds may join the bid.

JIC declined to comment when contacted by Reuters, whereas Norinchukin officials were not immediately available.

CVC earlier this month proposed to take Toshiba private, and is expected to soon provide details of its $20 billion proposal.

The chairman of Toshiba’s board has criticized CVC’s bid so far as “lacking in substance”, and has also said it would require cautious consideration due in part to regulations over foreign investment in Japanese companies with strategic technologies.

Toshiba’s technology is used in missile guidance and other defense systems, for example.

Media reports have also named KKR & Co Inc and Brookfield as also considering bids for the company. The Nikkei newspaper on Wednesday said CVC was planning to team up with Bain Capital.

The latest report comes a day after Toshiba appointed a new chief executive after controversy over previous leader Nobuaki Kurumatani who faced criticism over governance issues.

Reporting by Takashi Umekawa and Makiko Yamazaki; Writing by Ritsuko Ando; Editing by Shri Navaratnam and Christopher Cushing.

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Source: Reuters, Bloomberg Markets and Finance