Toshiba says tender offer to take it private will launch on Tuesday (updated)

Orix

07/08/2023 09:40

(Recasts and writes through)
    By Makiko Yamazaki and Anton Bridge
       TOKYO, Aug 7 (Reuters) - Japan's Toshiba  6502.T  said
on Monday a $14 billion tender offer to take the industrial
conglomerate private will be launched on Tuesday - an effort
that will, if successful, buy out activist investors and return
it to domestic hands.
    Toshiba's board initially said private equity firm Japan
Industrial Partners' 4,620 yen-per-share bid was too low to
recommend to shareholders. But it later concluded the price was
"fair" as there were no prospects of a higher offer amid
unfavourable economic conditions.          
    At least two-thirds of shareholders will need to tender
their shares for the bid to succeed. Although the outcome is not
clear, a successful bid would help draw a line under years of
upheaval for Toshiba.
    "Today marks a turning point for Toshiba. The company is
coming out of a tunnel after eight years," Akihiro Watanabe,
chairperson of the board, told a news conference.
    "For those shareholders who have yet to make up their minds,
I would ask them to read the material that has been disclosed
and make a firm decision," he added.
    Toshiba's shares closed below the offer price at 4,584 yen
on Monday before the announcement of the tender schedule, an
indication that investors are uncertain the bid will succeed.
    But some activist shareholders, although not satisfied with
the price, are tired of years of battles with the company and
are eager to exit, sources familiar with the matter have said.
    The tender offer, which values the electronics-to-power
stations maker at 2 trillion yen, will run until Sept. 20. It
was originally scheduled to start in late July, but was pushed
back due to a regulatory delay.
    The announcement coincided with Toshiba reporting its fourth
straight quarter of operating profit. Operating income climbed
to 11.4 billion yen ($80 million) compared with a loss of 4.8
billion yen in the same period a year earlier when it suffered
from higher materials costs.
    But it plunged to a net loss of 25.4 billion yen, battered
by a large investment loss from its 40.6% stake in memory chip
maker Kioxia Holdings which has seen demand slide.
    Some 20 Japanese companies will take part in the tender
offer. Major contributors include chipmaker Rohm  6963.T  with
300 billion yen and financial services firm Orix  8591.T  with
200 billion yen.
    Many are longtime business partners who are eager to keep
ties with Toshiba, the sources said.
    Toshiba has been embroiled in a range of crises since 2015,
including accounting debacles, the bankruptcy of its U.S.
nuclear power unit and a major governance scandal in which a 
shareholder-commissioned probe found Toshiba colluded with
Japan's trade ministry to block overseas investors from gaining
influence.
    ($1 = 142.2200 yen)

 (Reporting by Makiko Yamazaki and Anton Bridge; Editing by
Chang-Ran Kim and Edwina Gibbs)
 ((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))