Toshiba could be the target of takeover bid by a consortium that includes Tokyo Electric Power Company (Tepco), which reportedly has its eyes on a nuclear power subsidiary.
The energy utility’s Tokyo-listed shares fell 6% in afternoon trading on Wednesday after a report it might join state-backed Japan Investment Corporation and Japan Industrial Partners to buy the troubled conglomerate.
Tepco spokesperson Ryo Terada said the report was not true and Toshiba said it would not comment.
However, reports said Tepco would be keen to acquire Toshiba’s nuclear power unit.
Such a move by Tepco would mark a major development in the contest for Toshiba, which last month said it had received eight buyout proposals and two offers for capital alliances.
Weakened by a series of scandals, the conglomerate has promised to consider all options, including private equity buyouts, as part of a far-reaching review process.
The market appeared to worry about the impact of a potential acquisition on Tepco’s finances, driving down its stock.
The participation of local funds is seen as critical to winning government approval for a Toshiba buyout as some of the conglomerate’s key businesses – including defence equipment and nuclear power – are seen as strategically important to Japan.
Tepco, one Japan’s 30 largest firms by revenue, is 2.7% owned by the Tokyo Metropolitan Government, its third-largest shareholder, according to Refinitiv.
The utility owns the Fukushima Daiichi nuclear power plant crippled by an earthquake and massive tsunami in 2011 that touched off the world’s worst nuclear disaster since Chernobyl.
- Reuters, with additional editing by George Russell