Toshiba Corp. said it supports a buyout offer led by domestic private equity firm Japan Industrial Partners Inc., providing a boost to the chances of the long-discussed takeover going through.
Shareholders are recommended to tender their shares in the offer, the Tokyo-based firm said in a statement Thursday. Toshiba disclosed the buyout price is at the low end of estimates from outside experts based on financial projections, but said that its business outlook remains shaky. JIP’s bid was the only “fully competitive and fair” offer it received, it said.
Chief Executive Office Taro Shimada “has stated his concern regarding the achievability of the projected figures for FY2024 and FY2025 in the budget of FY2023 if the Company’s management base continues to be unstable,” the company said.
The announcement comes after Toshiba accepted a $15 billion bid from a consortium led by JIP in March. A sale could bring the curtain down on years of turbulence at the storied Japanese firm after a series of scandals plunged it into difficulty and set it on the path to a sale.
Read: Toshiba Accepts $15 Billion Buyout Bid From Japan Consortium
Once celebrated for its technology innovations, Toshiba paid what was Japan’s largest-ever penalty for falsifying financial statements in 2015. It then suffered a disastrous foray into the nuclear business that forced it to take a $6.3 billion writedown and sell off its crown jewel memory-chip business, now reorganized as Kioxia Holdings Corp.
Activists began circling the troubled company and, in 2021, it announced plans to split into three units, only to revise that plan in favor of a two-way split in 2022. The chief executive at the time resigned to take responsibility for the chaos, after which the company’s board began soliciting bids to take the company private.
That auction process had dragged on as bidders tried to arrange financing and win government approval. In February, Akihiro Watanabe, chairperson of the board, said as the company cut its profit forecast that there is an urgent need to transform the company.
At the same time as those financial resutls, Chief Operating Officer Goro Yanase stepped down from his position to take responsibility for inappropriate entertainment expense claims while he was a manager at Toshiba Energy Systems in 2019.