Over the past year, Toshiba’s shareholders have speculated about a takeover bid that would be Japan’s largest ever and an important milestone for the entry of privatized shares into the world’s third largest financial system. Some have claimed that the company is worth much more than $ 20 billion.
The decision by Toshiba’s controlling shareholder, Effissimo Investment Company, to approve Bain puts a huge strain on the Japanese company to actively pursue takeover bids from private equity-controlled consortia and find a solution to an extremely tumultuous relationship with shareholders.
The Singapore-based fund Effissimo claimed in a government statement on Thursday that it had offered to transfer about nine percent of its investment in Toshiba if Bain presented a bid that received regulatory approval.
Toshiba’s operations include nuclear power, security and electronics, in addition to its position as a symbol of Japanese industrial power (after Friday’s gain, Toshiba’s market capitalization is $ 17.3 billion).
Given the limitations of Japan’s recently updated exchange rates and international trade rules, investment banks say a complete takeover of Toshiba by a completely foreign consortium is unlikely.
The arrangement between Bain and Effissimo prevents them from giving away their shares to other potential buyers, which means significant problems for KKR, Blackstone and other limited companies that show great interest in getting Toshiba.
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