After years of struggle, the Japanese conglomerate Toshiba is taken over by a local financial investor. JIP is paying several billion for the company, which has been struggling for years.
The billion-dollar takeover of the technology group Toshiba, which was shaken by leadership disputes and scandals, is in the clear. Toshiba announced today that the majority of the previous owners had accepted the equivalent of $14 billion offer from the consortium around Japan Industrial Partners (JIP). This means that the 148-year-old traditional Japanese company’s departure from the stock market is getting closer.
With a shareholding of 78.65 percent, the financial investor JIP now has a sufficiently large majority to force the remaining shareholders to pay off (squeeze out) and take Toshiba off the stock exchange. “Activist shareholders and Toshiba had been at loggerheads for years,” said analyst Travis Lundy of investment advisor Quiddity Advisors. “With this takeover they can free themselves from each other’s grip.”
No counter-offer
Toshiba boss Taro Shimada was satisfied with the takeover by JIP: “We are very grateful that many of our shareholders have shown understanding for the company’s situation,” he said. Toshiba will now “take a big step into a new future with a new shareholder.”
However, some of the previous investors had expressed disappointment about the selling price for the conglomerate. However, according to Toshiba, there was no chance of a counteroffer.
When submitting the takeover offer, JIP promised to continue its business strategy. The current management should also remain in office. This will certainly brighten the mood in the company, said analyst Lundy: “However, to be successful, management must be able to sell a better story to investors.”
Management remains in office
Toshiba got into trouble due to an accounting scandal in 2015. Shortly afterwards, the US nuclear subsidiary Westinghouse also incurred billions in losses for the Japanese parent. Because Toshiba’s liabilities exceeded its assets for a longer period of time, the traditional company was temporarily threatened with forced exclusion from the Japanese stock exchange.
To avert this, Toshiba raised fresh capital in 2017. Activist US investors got involved. Some of them pushed for the company to be broken up. In 2021, a $21 billion complete sale of Toshiba to the financial investor CVC Capital failed.
Now, after years of struggle over the company’s future with activist shareholders from abroad, the electronics and power plant manufacturer is passing into domestic hands. In addition to memory chips, Toshiba also offers printers, air conditioning systems and numerous other products.