Toshiba shares jump on report of possible $19 billion takeover

TOKYO, Oct 13 (Reuters) – Shares of Toshiba Corp (6502.T) surged on Thursday following a report that a group led by domestic investors was considering a $19 billion offer – a potential deal that would likely lead to the creation of foreign activist shareholders. redeemed after years of strain.

A consortium led by private equity firm Japan Industrial Partners and which also includes Chubu Electric Power Co <9502.T> was awarded preferred bidder status in the second round of bidding, the agency reported. Kyodo press and other media.

The 2.8 trillion yen figure quoted by Kyodo would mark a 26% premium to Wednesday’s closing price.

The shares rose 7% in afternoon trading, on track for their biggest one-day gain in more than a year. They have increased by about 17% this year.

Once a historic conglomerate, Toshiba has been weakened by accounting and governance scandals. Attempts at turnaround have been overshadowed in recent years by discord between management and its many militant shareholders.

The consortium will provide around 1 trillion yen in equity, with the rest of the money likely to come from bank loans, Kyodo said, adding that financing talks were underway and the value of the offering could change depending on the situation. future movements in the Toshiba stock price.

Toshiba declined to comment on the report.

It was not immediately clear how many deals Toshiba was seriously considering, but the contest to take over the company is likely still an open race between Japan Industrial Partners and the state-backed Japan Investment Corp, Travis Lundy said. a Quiddity Advisors analyst who posts on the Smartkarma platform.

The pair previously joined forces to bid on Toshiba but have since gone their separate ways, sources said. Japan Investment Corp has since been in talks with private equity firm Bain Capital, one of several foreign funds to have passed the first round of tenders, local media reported.

Toshiba and activist shareholders are at odds over the company’s direction, with several large foreign funds pushing the conglomerate to consider private equity deals.

Tensions came to a head last year when a shareholder-commissioned inquiry found that management colluded with Japan’s Commerce Ministry – which views the company’s nuclear and defense technology as a strategic asset – to prevent foreign investors to gain influence at its 2020 shareholders’ meeting.

“The only way to get rid of militants is to buy them out,” Lundy said.

($1 = 146.8300 yen)

Reporting by Sam Byford; Editing by David Dolan and Edwina Gibbs

Our standards: The Thomson Reuters Trust Principles.