JIP-led 2 tril. yen Toshiba buyout begins in bid to turn it around

A 2 trillion yen ($14 billion) tender offer for Toshiba Corp. began on Tuesday, with its management calling on shareholders to accept the bid from a consortium led by Tokyo-based fund Japan Industrial Partners Inc. in an effort to turn around its business through delisting.

The consortium, which aims to restructure the trouble-ridden conglomerate as a privately-held company before relisting it again, said it will pay 4,620 yen per share in the offer though Sept. 20.

Toshiba shares rose 0.57 percent to 4,610 yen in the morning session in Tokyo, short of the offer price.

"It's been a rising market so investors are rather reluctant to lock in small gains in the tender offer," said Makoto Sengoku, senior equity market analyst at Tokai Tokyo Research Institute.

"Some of them may be taking a wait and see stance to see how activist shareholders will respond to the offer," he said.

Toshiba, which has faced a spate of problems following an accounting scandal in 2015, says the buyout will allow it to cut ties with overseas activist shareholders seeking short-term returns and rebuild its business under a more stable shareholder base.

The tender offer will be successful if at least two-thirds of Toshiba's outstanding shares are tendered for the consortium to purchase.

© Kyodo News