Toshiba soars on the stock market after CVC’s offer to buy 16,843 million euros

The stock rises 18% pending details of the venture capital proposal

The shares of the Toshiba conglomerate – known for its technology company but also present in other sectors such as energy and defense – soar 18% after its president confirmed that it had received a purchase offer from the venture capital fund CVC Capital Partners. The transaction is valued at more than 20,000 million dollars (16,843 million euros), according to the Nikkei newspaper and the company has confirmed. The regulator suspended the trading shares and on its return to trading, the share rises to the maximum allowed.

Toshiba’s president and CEO, Nobuaki Kurumatani, confirmed this Wednesday the information on the offer, advanced by the Nikkei economic daily, and on which the company’s board will discuss in a meeting in the next few hours.

According to Nikkei, CVC is considering offering a 30% premium over the current price of the Japanese group’s shares, which would raise the value of the transaction to almost 2.3 trillion yen (about 17.7 billion euros). This same Wednesday the formal proposal may arrive, according to the newspaper. If these figures are confirmed, it would become the largest venture-led purchase since 2013, and CVC’s largest acquisition.

The Japanese conglomerate remains a major defense and energy player in the country and owns a significant portion of Kioxia Holdings, which plans a public offering to go public this summer.

For the operation to go ahead, it is first necessary to obtain authorization from the Japanese regulator and also the go-ahead from the Government, given the group’s presence in sectors such as defense. Toshiba’s involvement in a number of strategic industries can complicate approval for sale to a foreign entity. Among other activities is Toshiba’s involvement in the decommissioning of the Fukushima Dai-Ichi nuclear power plant, a process that will take decades. The company developed a system to purify the contaminated radioactive water that leaks into the facility and is working with the utility to devise a plan to search for and remove the remnants of molten fuel at the bottom of the reactors.

The venture capital fund is also considering attracting other partners to participate in the acquisition. The proposal would aim to speed up decision-making at a conglomerate that has frequently faced complaints from its activist investors as it tries to recover from a series of scandals and heavy losses in recent years. The company hired Nobuaki Kurumatani, a former senior CVC executive, as its chief executive to repair investor confidence.

Among the most recent episodes, in March Toshiba shareholders voted in favor of the proposal by Singaporean fund Effissimo Capital, its largest shareholder, to open an independent investigation into the legitimacy of the company’s top leadership after denouncing irregularities in the vote to re-elect. to Kurumatani. The offer would limit this type of conflict, by leaving the company in the hands of a single shareholder.

Kurumatani, the first appointed non-group chairman in 53 years, was vice chairman of the Sumitomo Mitsui financial group before becoming chairman of CVC’s Japanese branch.

Toshiba has been the protagonist of a succession of accounting scandals in recent years, involving investigations by Japanese regulators, and its financial problems have led it to ditch its nuclear branch in the United States and its semiconductor subsidiary, the most profitable in the world. once Japanese tech giant.

The deal to buy Toshiba would be the second started in Japan this year by CVC, which has agreed to buy Shiseido’s personal care unit for $ 1.5 billion. The venture capital firm, which tends to focus on deals smaller than Toshiba’s, closed a € 21.3 billion fund, the eighth, for acquisitions last year.

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