Investors sent Toshiba shares sharply higher on Friday as they bet that the Japanese conglomerate could become the target of a bidding war after Bain Capital sounded out shareholders about a possible buyout.
The stock jumped 6.7% in morning Tokyo trade on expectations that global private equity firms could be lining up to take the embattled company private.
Its top shareholder, Singapore-based Effissimo Capital Management, said in a filing on Thursday that it had agreed to sell its 9.9% stake to Bain if the US private equity firm launched a tender offer.
Bain has sounded out multiple other Toshiba shareholders about teaming up as it prepares to make a buyout offer, sources said. Effissimo is the only shareholder to publicly pledge to tender its stocks to Bain.
Other global private equity firms are also interested in taking Toshiba private, different sources said. The agreement between Bain and Effissimo would not deter them from making buyout offers, they said.
The drama over the fate of 146-year-old Toshiba follows its November announcement that it planned to split into three companies in an attempt to appease activist shareholders calling for a radical overhaul after years of financial and governance scandals.
Possible Conflicts, Opposition
During a five-month review leading to that plan, Toshiba held discussions with private equity firms but decided not to entertain potential offers. It cited various reasons including possible conflicts with Japan’s national security law and potential opposition from antitrust regulators.
One global private equity firm sounded out Toshiba management about a potential buyout in January, saying that it could make a proposal if the company is interested, said the sources, who declined to be identified as the talks were private.
Japanese Industry Minister Koichi Hagiuda said on Friday Toshiba owns national security technologies such as nuclear power and semiconductors and that it is important to ensure such businesses are kept and grow.
“We’ll closely monitor the situation from this perspective,” Hagiuda told a regular news conference.
Toshiba said in a statement on Friday that it had not engaged in any discussions with Bain or Effissimo on their agreement.
Bain said late on Thursday that nothing had been decided about a tender offer and that there were many issues that needed to be resolved to launch a bid to take Toshiba private.
- Reuters with additional editing by Sean OMeara