Toshiba is considering a buyout offer from a British private equity fund, with reports suggesting the deal could be worth about $20 billion (roughly Rs. 1,47,040 crores).
The Japanese tech giant faces pressure from activist shareholders to improve its governance. If realised, the deal will shield management of the scandal-hit conglomerate, particularly Chief Executive Nobuaki Kurumatani, from scrutiny amid calls from large overseas shareholders for greater transparency from its board.
About Deal
CVC offered about 5,000 yen per share in its buyout proposal, according to a Toshiba executive. A bid at that level would value Toshiba at about 2.28 trillion yen ($20.7 billion)
Also it is the largest private equity-led buyout since 2013, and CVC’s biggest acquisition on record.
Impact on Stock Market
Toshiba’s US-listed shares hiked almost 20 per cent after the bid was revealed. In Tokyo,Toshiba shares rose by their daily limit of 18% to 4,530 yen per share at the close Wednesday.
The stock gained as much as 5.7% more on Thursday. Also, Shares in Toshiba were untraded in early trade with buy orders overwhelming sell orders.
Comment
“There have been false dawns before,” said Justin Tang, head of Asian research at United First Partners in Singapore. “But activism is taking hold now.”
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