TOKYO — Scandal-ridden Japanese electronics and technology maker Toshiba has accepted a 2 trillion yen ($15 billion) offer from Japan Industrial Partners, a buyout fund made up of major banks and corporations.
If successful, the proposal will mark a major step in Toshiba’s long-standing effort to turn the company around, allowing it to go public and delist from the Tokyo Stock Exchange. But foreign activist investors own a significant portion of Toshiba’s shares, and it’s unclear whether they’ll be happy with the latest bid.
Tokyo-based Toshiba Corp. announced Thursday that the board accepted the offer of 4,620 yen ($36) per share after trading closed in Tokyo. Toshiba closed at 4,213 yen ($32) per share on Thursday and gained 4.2% on Friday to 4,390 yen ($34).
The move comes at a time of market jitters over ripple effects from the recent US bank collapse
The acquisition would keep Toshiba’s business Japanese in an alliance with Japanese partners.
Founded in 2002 to restructure Japanese companies, Japan Industrial Partners lists big names in which it has invested, such as Sony, Hitachi, Olympus and NEC.
According to Japanese media, the consortium includes about 20 Japanese companies, such as Orix Corp., a financial services company, electronics manufacturer Rohm Co. and the mega banks, including Sumitomo Mitsui Banking Corp.
Toshiba’s deep troubles began with a massive accounting scandal in 2015, which involved years of book tampering. That added to the woes related to its nuclear energy business.
US nuclear arm Westinghouse filed for bankruptcy in 2017 after years of heavy losses as safety costs soared. Toshiba is also involved in the decommissioning of the Fukushima Nuclear Power Plant, which was severely damaged by an earthquake and tsunami in March 2011.
Toshiba has had several presidents over the years, as the brand, once lauded for making home appliances, laptops, batteries and computer chips, became targeted by foreign activist shareholders.
The latest proposal has yet to be reviewed by regulators in several countries, including the US, Vietnam, Germany and Morocco. The process is expected to take several months.
Toshiba has been trying to go private for the past few years. Proposals to split Toshiba into three and then two companies were rejected by shareholders. By delisting, Toshiba could leave activist investors behind.
Toshiba began modestly in a factory for telegraph equipment in 1875. The brand was synonymous with the strength of the modern Japanese manufacturing sector. It has sold parts of its business, including its flash memory business, now known as Kioxia, although Toshiba remains a stakeholder in Kioxia.
Whether Toshiba can get back on a solid growth path remains uncertain. Last month, Toshiba cut its profit forecast for the fiscal year through March to 130 billion yen ($1 billion), down from an earlier forecast of 190 billion yen ($1.5 billion).
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama