Bain Capital Considers Taking Toshiba Private

Private equity firm Bain Capital is considering a possible sale of Japan’s Toshiba Corp. in a move designed to carry out foreign shareholders’ wish to take the company private.

As the Financial Times reported Friday (April 1), shares in Toshiba rose by more than 6% following the news.

Sources close to the deal said Bain expects to be ready to submit a formal proposal to Toshiba “relatively soon,” and has received indications of support for a potential deal from the company’s top echelon.

According to Wall Street Journal, Bain said it wanted to conduct “careful and sincere” discussions with Toshiba’s management, the Japanese government and banks over the potential sale but said no decisions had been made.

“There are many issues that need to be addressed before delisting Toshiba,” Bain said in a statement.

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The Journal report said the potential deal comes just days after Toshiba’s management failed to find support for a proposal to split the business in half, with nearly 60% of shareholders vetoing the idea. This group was led by foreign shareholders who said Toshiba should look to more far-reaching options, like a sale to a private equity firm.

Effissimo Capital Management Pte., a Singapore-based firm that owns almost 10% of Toshiba shares, said in a regulatory filing that it would sell those shares to Bain if the private-equity firm started a tender offer for Toshiba.

The Journal report said a takeover of Toshiba led by an American firm would mark a milestone in business history. The company dates back to 1875 and has ties to national security operations like weapons systems and nuclear power-plant maintenance, which analysts say is likely to make deal discussions more complicated.

Toshiba said Thursday (March 31) it wasn’t involved in the discussions between Effissimo and Bain about the potential Bain takeover bid. The company reiterated previous statements that it would attempt to build trust with its shareholders and consider ways to boost corporate value.