Toshiba Corp. has selected a group of companies led by a Tokyo-based fund as the preferred bidder for a potential buyout of the Japanese conglomerate, sources familiar with the matter said Wednesday.
The fund, Japan Industrial Partners Inc., has asked several companies including Chubu Electric Power Co. and Orix Corp. to invest in an effort to rebuild the troubled conglomerate, whose market capitalization exceeds 2 trillion yen ($14 billion), the sources said.
With an eye to delisting the conglomerate upon a possible buyout, the fund-led group will need to procure several hundred billion yen as a premium on top of Toshiba's market cap of nearly 2.2 trillion yen as of the end of Tuesday.
Potential buyers of the Japanese conglomerate had been narrowed down to two groups of companies by the end of last month -- one led by Japan Industrial Partners and the other led by state-backed fund Japan Investment Corp.
Toshiba said on Sept. 30 that it had received multiple bids for restructuring plans from companies that passed the first round of bidding, without detailing the number.
Japan Industrial Partners will need to secure investments from major Japanese companies that it has called on to participate and loans from financial institutions to raise the remaining funds for the envisaged buyout.
Toshiba's plight began with an accounting scandal in 2015, followed by the 2017 bankruptcy of its U.S. nuclear plant subsidiary Westinghouse Electric Co.
A series of management woes have further tarnished its corporate image. In 2021, Toshiba executives were found to have colluded with the Ministry of Economy, Trade and Industry to prevent foreign activist shareholders from influencing the board by sending in directors, leading its shareholders to vote out some of the board members at the time.
