Why Cvc Capital relies on Toshiba
Private equity fund CVC Capital Partners has launched a $ 20 billion bid on Toshiba. All the details
Leading Japanese electronics manufacturer Toshiba Corp could go private.
Toshiba confirmed in a statement that it had received a takeover offer from British private equity firm CVC Capital Partners.
An offer that, according to the Japanese newspaper Nikkei , could exceed 20 billion dollars.
"We were not first consulted by CVC on this offer and we only received a first proposal yesterday," the Japanese conglomerate specified. Adding that he requested detailed information from Cvc for a “careful” examination of the project.
Toshiba, one of the historical names of Japanese entrepreneurship, is however a vulnerable empire as demonstrated by the crisis in recent years.
However, an offer from a non-Japanese company should receive the approval of the Tokyo government for national security reasons, as Toshiba also operates activities in the nuclear energy sector.
The company's share price jumped in Tokyo and the United States on news of the possible deal.
All the details.
PURCHASE OFFER CONFIRMED BY TOSHIBA
The Japanese conglomerate confirmed that it has received "an initial proposal" which will be discussed by the board of directors today.
Toshiba intends to "seek further clarification" and prepare for "careful consideration" of the offer on which it "will make a further announcement in due course".
THE PROPOSAL OF CVC CAPITAL PARTNERS
Financial newspaper Nikkei recalls that CVC, which has offices in 23 countries and $ 117.8 billion in assets under management, also recently acquired the Shiseido personal care business.
CVC's offer represents a premium of 30% on the current value of the shares.
Nikkei also revealed that CVC would consider the possibility of recruiting other investors to participate in the acquisition.
THE FUND IS NOT FOREIGN IN TOSHIBA
As the Financial Times CVC points out, however, it is no stranger to Toshiba. Toshiba's number one Nobuaki Kurumatani, a former banker, was president of the Japanese branch of the European fund before taking up the post of CEO of the Japanese conglomerate. Yoshiaki Fujimori, senior executive director of CVC in Japan, is also a board member of the Japanese group.
THE STRATEGY ACCORDING TO THE ANALYSTS
According to analysts, the British financial giant's strategy is based on the desire to make Toshiba private in order to drastically influence its corporate governance structure. So as to accelerate its decision-making processes, seen by the market and by investors as cumbersome and no longer in line with the needs of the global market.
The takeover bid would limit conflicts with activist investors by leaving the company with a single shareholder.
HOW IS TOSHIBA PASSING
Long regarded as one of Japan's most respected brands, Toshiba has faced ethical issues and scandals in recent years. In 2015, he acknowledged that he had systematically falsified his books as managers tried to achieve overly ambitious goals.
After the 2015 accounting scandal, the group embarked on a major restructuring.
THE BANKRUPTCY OF NUCLEAR ACTIVITY IN THE USA
Without forgetting the heavy losses related to the bankruptcy of its US subsidiary active in the nuclear energy sector in 2017.
And the costs of its nuclear operation also increased in Japan after the Fukushima nuclear disaster.
FORCED TO SELL HIS CHIP BUSINESS
Not only that: the group no longer produces personal computers and televisions and sold its profitable division of computer storage devices in 2018.
To offset the liabilities, in 2017 Toshiba decided to sell the chip business to Bain Capital , for 22 billion dollars.
However, after the restructuring, its earnings rebounded and the company returned to the prestigious first section of the Tokyo Stock Exchange in January.
TOKYO FREE ROUTE REQUIRED
Finally, as we said at the beginning, an offer by a non-Japanese private equity fund would also require the approval of the Japanese government. An acquisition of Toshiba would be particularly sensitive because it operates the country's nuclear power plants.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/perche-cvc-capital-punta-su-toshiba/ on Wed, 07 Apr 2021 13:24:51 +0000.