Toshiba Issues Cautious Statement on Unsolicited Bid by CVC Capital Partners

Video source: YouTube, Nippon TV News 24 Japan

Following British private equity firm CVC Capital Partners’ bid to acquire Toshiba Corporation (OTC US: TOSYY ), the Japanese industrial company issued a statement on Friday calling the proposal unsolicited, unexpected and preliminary.

Osamu Nagayama, Toshiba chairman, said, “This initial proposal by CVC was completely unsolicited and not initiated by Toshiba by all means. The proposal does not go through detailed review of Toshiba business.”

“Further, CVC’s initial proposal is conditional on a variety of matters such as clearances of the anti-trust registrations of the relevant jurisdictions, the Foreign Exchange and Foreign Trade Act of Japan and necessary financing,” he said. 

Any deal would also require CVC to tap external financing, a process that Nagayama said would involve “a substantial amount of time and involve complexity for consideration.”

Earlier this week, Toshiba disclosed that CVC had made a preliminary bid to buy out Toshiba’s public shareholders for 5,000 yen per share or about 2.28 trillion yen ($20.7 billion), according to Bloomberg News.

Nagayama said Toshiba would seek further details about CVC’s bid and consider the proposal “when it is further clarified in the future.”

The Wall Street Journal noted that if CVC’s proposed transaction went through, it would be one of the largest leveraged buyouts in history and possibly the largest in Asia, rivaling Bain Capital’s 2018 acquisition of Toshiba’s flash-memory business. 

According to Reuters, the acquisition would shield Toshiba and chief executive officer Nobuaki Kurumatani following increasing pressure from activist shareholders and questions over the company’s governance. 

Kurumatani, a former president of CVC’s Japan unit, took the helm of Toshiba last year in the wake of an accounting scandal and record losses. 

Last month, Toshiba’s largest shareholder, Singapore-based activist investor Effissimo Capital Management, called for an investigation into whether last year’s shareholders’ meeting was conducted fairly. 
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Source: Equities News