(Adds analyst comment; updates share move)
TOKYO/HONG KONG, June 23 (Reuters) - Bidders for Toshiba
Corp are considering offering up to 7,000 yen ($51.41)
per share to take the troubled Japanese conglomerate private,
three people familiar with the situation told Reuters, valuing
the deal at about $22 billion.
Toshiba, which is exploring strategic options, said this
month it had received eight initial buyout proposals and two for
capital alliances that would see it remain listed.
The bidders are now discussing an offer price range of up to
7,000 yen a share with Toshiba's shareholders, the people said,
representing up to a 27% premium to Toshiba's share price of
5,501 yen as of Wednesday's close.
The conglomerate's shares rose as much as 6.5% on Thursday,
compared with a 0.1% fall in the benchmark Nikkei average
The offer price, if finalised, would value the chips to
nuclear reactors conglomerate at 3 trillion yen ($22 billion),
at the top end of the range.
A separate source said the range of offers was wide and
various conditions have been attached.
Toshiba told Reuters it would not disclose details of the
A wide bid price range and conditionality suggests that some
assets of Toshiba would need to be carved out, or spun out,
Travis Lundy, Quiddity Advisors analyst who publishes on
Smartkarma, wrote in a report.
If some assets are spun out, that would mean "a lower price
for the rest of the basket", he wrote, adding the up to 7,000
yen per share price suggests that may be the top price in the
"While everyone probably needed to spend the time and effort
getting into the first round, if due diligence and a worsening
market environment start to make Toshiba a less interesting
candidate for a particular bidder, they can bid to miss in Round
2, by lowering price."
Reuters reported in December, citing sources, at least one
private equity firm had told the Toshiba committee tasked with
its strategic review that a deal to take it private could be
done at 6,000 yen a share or more.
KKR & Co Inc, Baring Private Equity Asia, Blackstone
Inc, Bain Capital, Brookfield Asset Management,
MBK Partners, Apollo Global Management and CVC Capital Partners
have submitted initial bids, according to the people.
Some of them may form consortia for a bid, they added.
Bain, Blackstone, Brookfield, Baring, CVC, KKR and MBK
declined to comment. Apollo did not immediately respond to a
request for comment.
Domestic funds, including Japan Investment Corp (JIC), and a
number of strategic players are looking to see how they can
participate in the deal, the people said, declining to be named
as they were not authorised to speak to media.
JIC declined to comment.
If successful, the Toshiba deal would be the largest buyout
transaction in Japan since a consortium led by Bain took private
the conglomerate's memory chip unit, Kioxia, for $18 billion in
The discussions are taking place at a time when a weak yen
continues to haunt Japan's economy, threatening to disrupt
Japanese firms' business plans and turn them into attractive
acquisition targets for foreign buyers.
The yen plunged to a new 24-year low of 136.71 per
dollar early on Wednesday.
Of all the potential bidders, Bain has been "very
aggressive" in pushing for a buyout, said two of the people.
A Japanese investment banker with knowledge of the deal
separately said even at 6,500 yen per share the valuation for
Toshiba seemed "too stretched".
Ultimately, he said, the price would have to take into
account how investors value Toshiba's 40% stake in unlisted
That gave Bain an advantage over other bidders, he said,
because the private equity firm owned the bulk of Kioxia,
meaning it would decide the fate of the chipmaker, which in turn
would impact the valuation of Toshiba.
Bedevilled by accounting and governance crises since 2015,
Toshiba set up a special committee in April to solicit proposals
after shareholders voted down a management-backed restructuring
The company said earlier it would shortlist bidders for due
diligence after its annual shareholders' meeting on June 28.
($1 = 136.1500 yen)
(Reporting by Makiko Yamazaki in Tokyo, Kane Wu and Scott
Murdoch in Hong Kong; Editing by Sumeet Chatterjee, Jason Neely
and Tomasz Janowski)