JIP To Launch Tender for Toshiba Priced at $15 Billion

On August 7, Toshiba announced that a group led by private equity firm Japan Industrial Partners (JIP) would launch a $15 billion tender offer on August 8 to take the industrial conglomerate private and place it in domestic hands.

The tender offer, which values the maker of electronics-to-power stations at 2 trillion yen ($14 billion), will end on September 20. It was supposed to begin in late July, but it was pushed back due to a regulatory delay.

The Toshiba board initially stated that the offer price of 4,620 yen per share was too low to recommend that shareholders tender their shares, but later concluded that the price was "fair" given the lack of a higher offer or competing bid and the unfavourable economic conditions.

According to sources familiar with the matter, some activist shareholders, while dissatisfied with the price, are tired of years of battles with the company and eager to exit.

The transaction will involve 20 Japanese companies. Chipmaker Rohm contributed 300 billion yen, and financial services firm Orix contributed 200 billion yen. According to the sources, many of the investors are Toshiba's long-term business partners who want to keep working with the company after the buyout.