Toshiba working with JIP to expedite $15-billion buyout

Toshiba Corp said on Friday it was working with Japan Industrial Partners (JIP) to quickly complete a $15-billion buyout by the private equity firm amid the forecast of another year of weak earnings.

After Toshiba’s board in March accepted a 2 trillion yen ($14.8 billion) buyout offer from the JIP-led group, Toshiba has “received positive responses from various stakeholders, including many customers, business partners and employees”, it said in a statement.

“The management team concluded there was an expectation that the transaction would help the company build a stable management base”, and “is therefore working with JIP to quickly complete the transaction”, it said.

The board has yet to decide whether to recommend shareholders tender their shares, saying that while the deal would give shareholders a reasonable exit to recover their investment, the offer price of 4,620 yen per share is likely not satisfactory.

Toshiba chief financial officer Masayoshi Hirata reiterated at an earnings briefing on Friday that the board would make its decision before JIP starts its tender offer in late July. He added that he had not heard of any new offer from other parties.

The company plans no major changes to its board composition for its annual shareholders meeting in June, as the board’s main responsibility now is to oversee management’s effort to realise the buyout, it said.

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Toshiba forecast an operating profit of 110 billion yen for the financial year through March 2024, just below 110.5 billion yen the year before, weighed down by higher materials costs as well as expenses for restructuring. The forecast is well below an average estimate of 166.03 billion yen from seven analysts in a Refinitiv poll.

Separately, Kioxia Holdings Corp, a memory chip maker, where Toshiba owns 40.6%, reported a net loss of 138.1 billion yen in the year ended in March, due to weak demand for personal computers and smartphones.

Near-term demand remains weak due to economic uncertainty, but the market is expected to gradually improve toward the October-March second half, it said.

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