Here’s how the Japanese state fund Jic is targeting Toshiba

Here's how the Japanese state fund Jic is targeting Toshiba

Japan Investment Corp. is looking to take over Toshiba, the Japanese giant that has long been at the center of a corporate risk. The Japanese state fund is in talks with Bain Capital to make a joint offer

The sales dossier for Toshiba, the Japanese giant focused on electronics for some time at the center of a corporate risk, reopens.

Japan Investment Corp (JIC), a Japanese parastal fund is in talks with private equity firm Bain Capital to form a consortium and bid for Toshiba, after breaking up with its former partner, the Nikkei newspaper reported Wednesday. taken up by Reuters .

It would mark a second proposal for Toshiba from Jic, the reports found. This summer, Toshiba selected a number of financial companies – Bain Capital, CVC Capital Partners, Brookfield Asset Management plus a consortium that includes the state-owned Japan Investment Corp – for a second round of bids.

Last year, Toshiba refused to consider the takeover offer from private equity fund CVC Partners, to shareholder disappointment. In the meantime, management has tried to carry out a restructuring by dividing the company in two . However, in March the shareholders voted against the plan, for which the management was forced to propose alternatives to the shareholders, including that of the sale.

According to Nikkei , Jic aims to submit a proposal as early as next month. The fund hopes to attract foreign investors through financing. But "analysts agree that a possible acquisition of Toshiba will probably be complex and will necessarily have to involve Japanese investors, given that the various activities of the group are very sensitive for the Japanese state (from nuclear to defense, passing through semiconductors and quantum cryptography), ” CorCom points out.

Here are the details.


As Reuters recalls, the JIC fund had previously joined forces with private equity firm Japan Industrial Partners (Jip) and their offer had passed the first round of offers.

However, Japan Investment Corp and Japan Industrial Partners have since decided not to pursue a bid together, both Nikkei and Kyodo News point out. According to Kyodo News Jip and Jic disagreed on the proposal, prompting Japan Investment Corp to consider a new partnership with foreign funds that have also passed Toshiba's first round of offers.


That is, these are Bain Capital (based in the US) and CVC Capital Partners (based in the UK).


Meanwhile, Japan Industrial Partners has also reached out to more than 10 Japanese companies, including Chubu Electric, Orix Corp and Central Japan Railway Co to join its consortium, the Nikkei newspaper reported.


In February 2022, Toshiba presented a plan to split the company into two different, separately listed entities, after a controversial project that involved splitting it into three divisions in an attempt to increase its profitability.

But in March, during an extraordinary meeting, the shareholders rejected it.


In recent years, the management of Toshiba – whose interests range from industrial to nuclear power plants and advanced research – has been the subject of numerous criticisms from shareholders asking executives for a well-defined strategy to increase the ability to generate income. In June 2021, an independent investigation into the company revealed an attempted collusion between the board of directors and the Tokyo government, tending to prevent a greater presence of foreign investors in the company organization chart.

The news led to the surprise exit of the chairman of the board of shareholders, Osamu Nagayama, along with another member of the committee who was designed to ensure the transparency of the company's financial operations.

Finally, in August the Japanese conglomerate released the results for the first quarter of the financial year 2022, which indicate a loss of 4.8 billion yen (equal to 35.6 million dollars). This is Toshiba's first quarterly loss in two years.

This is a machine translation from Italian language of a post published on Start Magazine at the URL on Thu, 22 Sep 2022 10:17:41 +0000.