The offer runs until September 30th. JIP and its consortium aim to get two thirds of Toshiba’s shares. The offer price values Toshiba at $14 billion.
In February, JIP proposed a bid worth $15.2 billion but a deteriorating commercial performance, with a $176 million loss in Q2, has resulted in a reduced offer.
Back in April 2021, the private equity outfit CVC offered to buy out Toshiba for $21 billion.
Next November, Toshiba plans to hold a meeting at which, depending on how many shares the JIP alliance manages to buy, strategies will be adopted to acquire the outstanding shares it still doesn’t own by then. By the end of the year, Toshiba hopes to have taken the company private with full control.
It seems there are still some disagreements about the influence which investors will have in the management of Toshiba after the offer goes through. “The buyout is structured in a way that would prevent the investors from directly getting involved in the operations of the company,” says Toshiba CEO Taro Shimada.
Also to be resolved is the ongoing attempt by Western Digital (WD) to buy Kioxia. Kioxia, which is currently loss-making, is 40% owned by Toshiba and 56% owned by Bain Capital which paid Toshiba $18 billion for its 56% stake.
WD jointly owns some Japanese NAND production facilities in a jv with Kioxia from which Kioxia and Western Digital share the output 50-50.
One WD buy-out proposal is reported to be that WD would spin off its flash business and merge it with Kioxia, creating a publicly traded company in the US managed by Western Digital.
A more recent reported alternative proposal is that WD would own slightly more than 50% of the merged entity but Kioxia execs would run it. Under this proposal, WD-Kioxia would be initially listed on the Nasdaq with a Tokyo listing later on. Bain would receive a special dividend either in cash or shares.
The financials are unusual. Toshiba’s market cap is currently $14 billion, WD’s market cap is $13.8 billion and Kioxia is said to be worth anything between $20 and $28 billion. Last August, Western Digital made an all-share offer worth $20 billion for Kioxia which was $7 billion more than WD’s then market cap of $13 billion.
