TOKYO, Oct 13 (Reuters) – Shares in Toshiba Corp ( 6502.T ) rose on Thursday after a report that a group led by domestic investors was seeking a $19 billion bid, a potential deal that would likely lead to foreign activist shareholders. bought after years of tension.
A consortium led by private equity firm Japan Industrial Partners and also including Chubu Electric Power Co ( 9502.T ) has been awarded preferred bidder status in the second round of tenders, Kyodo news agency reported and other means
The 2.8 trillion yen figure quoted by Kyodo would mark a 26% premium to Wednesday’s closing price.
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Shares were up 7% in the afternoon, on track for their biggest one-day gain in more than a year. This year they have increased by 17%.
Toshiba, once a storied conglomerate, has been weakened by accounting and governance scandals. Attempts to turn it around have been overshadowed in recent years by discord between management and its many activist shareholders.
The consortium will provide about ¥1 trillion in equity, with the rest of the money likely to come from bank loans, Kyodo said, adding that financing talks were ongoing and the value of the offer could change in based on future movements in Toshiba’s share price.
Toshiba declined to comment on the report.
It was not immediately clear how many bids Toshiba is seriously considering, but the contest to take over the company is likely still an open race between Japan Industrial Partners and state-backed Japan Investment Corp, Travis Lundy said. Quiddity Advisors analyst who posts on the Smartkarma Platform.
The two had previously teamed up to make a bid for Toshiba, but have since gone their separate ways, sources said. Since then, Japan Investment Corp has been in talks with private equity firm Bain Capital, one of several foreign funds that approved the first round of bids, local media reported.
Toshiba and activist shareholders have been at odds over the company’s direction, with several large foreign funds prompting the conglomerate to consider private equity offers.
The tensions came to a head last year when a shareholder-commissioned investigation concluded that management had colluded with Japan’s trade ministry, which sees the company’s nuclear and defense technology as a strategic asset, to prevent for foreign investors to have influence at its 2020 shareholder meeting.
“The only way to get rid of activists is to buy them off,” Lundy said.
($1 = 146.8300 yen)
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Reporting by Sam Byford; Editing by David Dolan and Edwina Gibbs
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