British private equity firm CVC Capital Partners has proposed a buyout of Toshiba Corp. to take it private in a deal likely worth around 2 trillion yen ($18 billion), the Japanese firm's president said Wednesday.
Toshiba President Nobuaki Kurumatani admitted that a proposal has been made. "We will discuss it at our board meeting," Kurumatani told reporters. Prior to taking the helm, Kurumatani served as chairman of CVC's Japan unit.
The investment firm will discuss terms with the management of the Japanese electronics and infrastructure conglomerate and coordinate with the Japanese government, sources familiar with the matter said.
Toshiba has faced pressure from activist shareholders and taking the Japanese firm private would enable quick management decisions, the sources said.
Based on Tuesday's closing stock price, Toshiba is capitalized at 1.74 trillion yen. It is customary to pay a premium in a tender offer, making it likely that the envisaged buyout would reach 2 trillion yen if all Toshiba shares are acquired.
But the purchase of Toshiba, which has a nuclear power business, would need to be screened and approved by the Japanese government under the country's law regulating foreign investment in companies due to national security reasons.
Toshiba has undergone sweeping restructuring following an accounting scandal in 2015, followed by the bankruptcy of its U.S. nuclear plant subsidiary in 2017.
It has exited from unprofitable TV, personal computer and U.S. nuclear power businesses while selling its chip-making subsidiary to a consortium led by U.S. private equity fund Bain Capital in 2018.
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