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Toshiba Receives Buyout Offer From CVC

Japanese tech company Toshiba has officially confirmed that it has received a buyout offer from CVC Capital Partners. If accepted, the deal could be valued at more than US$20 billion (about $A26 billion), making it the largest private equity-led acquisition in almost a decade.

In a statement on Wednesday, Toshiba said it would gather more information regarding the offer and then consider the proposal carefully, with its board planning to meet and discuss the potential deal.

Toshiba’s market capitalisation as of Tuesday’s close was slightly higher than ¥1.7 trillion (about A$20.2 billion). The Nikkei newspaper said CVC was offering a 30 per cent premium, suggesting the proposal would value Toshiba at just over A$26 billion.

Shares in Toshiba on the Tokyo Stock Exchange weren’t traded on Wednesday morning, due to a flurry of buy orders – a flood, even at the upper end of the day’s trading range.

Data compiled by Bloomberg shows that private equity firms have announced US$15.1 billion (around A$19.7 billion) in deals targeting Japanese firms over the past 12 months.

Toshiba CEO Nobuaki Kurumatani was a senior executive at CVC before joining Toshiba in 2018 as the first outsider to lead the company in more than 50 years. Since then, he has been trying to regain investor confidence after Toshiba was battered by accounting scandals and record losses.

The Nikkei reported earlier that CVC plans to propose a deal to take Toshiba private through a tender offer that could be worth more than US$20 billion (approx. A$26 billion). That would make it the largest private-equity-led buyout since 2013, and CVC’s biggest acquisition on record. A formal proposal may be unveiled as soon as Wednesday, according to the Japanese publisher.

CVC is expected to partner with other investment funds to finance the deal, which was first reported by Nikkei Asia. The Luxembourg-based buyout group declined to comment.

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