CVC Capital Partners is weighing a $ 20 billion bid for a majority stake in Toshiba, which could take the Japanese industrial block private and remove moving investors from its shareholder register, according to two knowledgeable people. Negotiating
The deal, which will rank among the 20 most leveraged acquisitions in history, will be another turn in the corporate saga that brought Toshiba from a profit scandal in 2015 and Bankruptcy two years later led to a humiliating defeat in Showed their cards against the largest shareholder last month.
CVC is expected to partner with other investment funds to finance the deal, first reported by Nikkei Asia, a Luxembourg-based buyout group, declined to comment.
In a statement on Wednesday, Toshiba said it would carefully study the preliminary offers received by CVC a day earlier.
Removing 145-year-old Toshiba from the Tokyo Stock Exchange in a foreign-led deal would be a symbolic move, advisors said, it was directly related to the conglomerate after years of moves and acquisitions by foreign funds. US private equity firms such as Bain and KKR see Japan as one of the most targeted markets in the world.
But Toshiba is particularly vulnerable. The company’s protracted financial crisis triggered by the 2017 collapse of its U.S. nuclear business was temporarily resolved when the company hired Goldman Sachs to issue $ 5.3 billion of emergency bonds.
Although the deal will be completed quickly. But it also leaves Toshiba shareholders registered with the Foreign Activities Fund, a group that could see lucrative exit opportunities if the CVC deal is completed at a large number of premiums.
Toshiba’s activist investors include Singapore-based Effissimo fund, which is the group’s largest shareholder and led the pressure on chief executive Nobuaki Kurumatani to be hired in the year. 2018 to transform the company
In the three years since taking office, Kurumatani has repeatedly clashed with shareholders. At an extraordinary general meeting last month, Toshiba executives suffered a humiliating setback after shareholders voted in favor of Effissimo’s proposal for an investigation into the company’s behavior during the annual general meeting of the year. already
Bids by non-Japanese private equity funds are subject to approval from the Japanese government, and the acquisition of Toshiba will be particularly sensitive as it operates the nation’s nuclear facility.
CVC, however, is no stranger to Toshiba.Kuruma Tani, a former banker, was the chairman of Japan’s European Fund before taking over as Toshiba chief executive Yoshiaki Fujimori, CVC’s chief executive adviser in Japan, was a member. Of the committee of the Japanese group as well
The deal will be one of the largest leveraged acquisitions since the 2008 financial crisis, at the same level as Thyssenkrupp’s € 17.2 billion leveraged acquisition by Advent International and Cinven when Last year according to Refinitiv
CVC raised 21 billion euros last year for deals in Europe and America and a separate $ 4.3 billion Asia fund, according to its website.
But the purchase of Toshiba is a departure from the usual form of deals for regional companies, typically buying segments valued at between $ 250 million and $ 1.5 billion. In February it bought a majority stake in Shiseido’s personal care business.
CVC’s latest deal includes a £ 365m stake in Six Nations rugby and stakes in two UK companies, whose software is behind the NHS launch of the coronavirus vaccine.
Previously, several private equity firms had bid for Toshiba, calculating that if they destroy the company, the sum of the parts could be greater than their current valuation, one consultant for the industry said. However, the consultant added that the size and complexity of the previous deals made it difficult to pull off.
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