Japanese private equity firm JIP makes $15 billion bid for Toshiba

The Japanese private equity investment company "Japan Industrial Partners" (JIP) has submitted a formal proposal for about 2.2 trillion yen (about 150 billion) to acquire Toshiba.

The offer is based on Toshiba's current share price. Toshiba's special committee will decide whether to accept the offer.

JIP emerged from the first round of bidding last month and was selected as a preferred bidder by Toshiba. Subsequently, JIP approached more than 10 Japanese companies, including Chubu Electric, leasing company Orix Corp, Tokai Railway (CJR) and Nippon Life Insurance Company (NFI), etc., to form a bidding alliance.

Of the roughly 2.2 trillion yen offered, about 1 trillion yen will come from several Japanese companies the report said. It is reported that more than 10 companies have expressed their willingness to contribute. In addition, JIP itself will invest 100 billion yen.

The rest will be provided by financial institutions in the form of loans and capital investments, but these creditors will not have voting rights. But as of today, JIP has not received loan commitment letters from financial institutions. Regardless, JIP is in talks to close the financing by the end of November. Of course, the precondition is that Toshiba accepts its proposal.

Toshiba has been plagued by financial and governance crises since 2015. Toshiba formed a special committee in April to solicit outside investment proposals after shareholders voted down a management-backed restructuring plan. The special committee, made up of seven outside directors, including two activist shareholders, will discuss whether to recommend the proposal to other shareholders.

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