The recommendation of the deal comes after the board of directors' meeting which considered the positive responses from the special committee established by the company and has concluded that the transaction will significantly contribute to the enhancement of its corporate value
Toshiba board recommends shareholders to vote in favour of JIP-led consortium's $14bn takeover bid. (Credit: 円周率３パーセント/Wikimedia Commons)
Japanese conglomerate Toshiba said that its board has recommended shareholders tender their shares in favour of the previously announced takeover bid of JPY2 trillion ($14.3bn) put forth by a group led by Japan Industrial Partners (JIP).
According to Toshiba’s board, the transaction will significantly contribute to the enhancement of the company’s corporate value.
The recommendation of the deal comes after the board of directors’ meeting which considered the positive responses from the special committee established by the company.
Toshiba stated: “The Transaction is expected to contribute to the solution of the Company’s business environment and management challenges, in particular, in light of the possibility that, as a result of the Transaction, the Company would build a stable management base to implement a consistent business strategy to reform and grow the Company over the medium to long term, and would be able to receive unified support from its shareholder.”
Earlier, the company’s board refrained from recommending shareholders to tender their shares as it considered the offer price not high enough.
The takeover bid from the Japanese private equity firm-led group that includes 17 domestic companies and six financial institutions was accepted by Toshiba’s board in March 2023.
Under the terms of the transaction, the publicly-listed conglomerate’s shareholders will receive JPY4,620 ($33.06) per share.
Upon the completion of the deal, Toshiba will become a privately held company and its common stock will be delisted from the Tokyo Stock Exchange.
Initially, JIP’s proposed buyout was priced from JPY5,200 to JPY5,500 as on 30 September 2022.
Later, the price was decreased to JPY5,200, JPY4,710, and JPY4,610 in the proposals dated November 2022, February 2023, and March 2023, respectively.
The company’s negotiations with the private equity firm resulted in an additional JPY10 per share from the last buyout offer.