Global private equity firm CVC Capital Partners will propose a deal to acquire Toshiba through a tender offer that is expected to be worth more than $20 billion, Nikkei learned.
CVC is considering a 30% premium over the Japanese industrial group’s current share price, which would put the value of the deal at nearly 2.3 trillion yen ($20.8 billion) based on Tuesday’s close. The equity firm will consider recruiting other investors to participate in the acquisition.
The proposal aims to speed up decision-making at a company that has frequently butted heads with activist investors as it tries to turn itself around following a string of scandals and heavy losses over the past several years.
CVC will discuss the terms with Toshiba’s management team, which will consider whether the proposal would benefit its shareholders before making a decision.
The private equity firm plans to launch the tender offer if it can get the green light from regulators. The Finance Ministry would need to screen the deal in advance, under legislation last year that imposes tougher scrutiny on foreign investment in companies involved in sensitive fields such as nuclear technology.
Toshiba continues to grapple with the fallout of a financial crisis several years ago stemming from accounting fraud and billions of dollars of losses surrounding a U.S. nuclear subsidiary.
In 2017, faced with the prospect of delisting from the Tokyo Stock Exchange after two years of negative net worth, the company raised 600 billion yen in a capital increase that activist investors flocked to. It has continued to clash with them since.
The tender offer would limit these conflicts by leaving Toshiba with a single shareholder. The company looks to focus on fields such as renewable energy and infrastructure to drive future growth.
CVC, which has offices in 23 countries and $117.8 billion in assets under management, also recently acquired the personal-care business of Shiseido. It was previously involved in a management buyout of Japanese restaurant chain operator Skylark in 2006.