Bain steps up pursuit of Toshiba, gets biggest investor backing

Bain Capital has secured the backing of Toshiba’s largest shareholder and opened talks with other investors as the US acquirer plots a deal to take the 140-year-old industrial conglomerate’s 140-year-old conglomerate. Japan is private.

The private equity firm is expected to be able to file a formal proposal for Toshiba “Relatively soon,” according to people close to the situation and have received signs of support for a potential deal from top levels of the company’s leadership.

The decisive backing for Bain by Toshiba’s largest shareholder, Effissimo Capital Management, puts considerable pressure on the Japanese company to aggressively issue buyout offers from private equity-led corporations. leadership and find a way out of an increasingly strained relationship with shareholders.

In a regulatory filing on Thursday, Singapore-based fund Effissimo said it had agreed to sell its 9.9 percent stake in Toshiba if Bain made an offer that met the approval of the company. law.

The reality is that Bain’s offer won’t go unnoticed by Toshiba executives and board members, according to people close to the company, as opposed to a preliminary approach taken by surprise. made last April by rival private equity firm CVC eventually led to the resignation of chief executive Nobuaki Kurumatani.

Bain has spoken with other major shareholders about their potential response to an offer and opened discussions with Japanese investors that would form part of the acquisition consortium and help appease regulatory concerns about Toshiba falling into full foreign ownership.

In addition to its status as a symbol of Japan’s industrial strength – Toshiba has a market capitalization of $16.5 billion – Toshiba’s businesses span sensitive sectors, including nuclear energy nuclear, defense and semiconductors.

Bankers and lawyers say a complete takeover of Toshiba by an all-foreign conglomerate may not be possible, given the strict rules of Japan’s recently revised foreign exchange and trade law. Version (Fefta).

The agreement signed between Bain and Effissimo prevents the company from selling its shares to any other potential bidders, which significantly hinders KKR, Blackstone and other PE firms that have explored deals. acquisition with Toshiba.

Last week, in a rare confrontation and historic moment for the Japanese company, Toshiba investors rejected company proposal to split itself in twobut also rejected a plan from a major shareholder calling for the Japanese conglomerate to reopen talks over a possible takeover.

Regardless of the outcome, Toshiba senior figures took the vote as a stark warning that, without opening the door to negotiations with potential suitors, the company risks a permanent impasse. and lasting damage to its competitiveness, said people familiar with the matter.

In a statement, Bain said that no decision has yet been made on a bid for Toshiba, adding that “we recognize that there are many challenges that need to be addressed.” The group will hold talks with Toshiba management, the Japanese government, banks and other stakeholders.

Toshiba said it was not party to the deal between Effissimo and Bain, but added that it would “do its best to build trust with shareholders and rethink its strategic options to enhance valuations.” business continuity”.

Effissimo said it has made the necessary disclosures and that “while we plan to share our thoughts on this topic at the appropriate time, we ask for your patience at this point. “.

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