Toshiba's $15B Buyout Deal In Trouble, Foreign Investors Might Drop

  • The $15 billion buyout of Toshiba Corp TOSYY TOSBF may end up purely as a Japanese deal, as most foreign buyers may opt-out.
  • Talks to bring Blackstone Inc BXBPEA EQT, and CVC Capital Partners on as equity investors have stalled, Bloomberg reported citing people familiar with the matter.
  • The bidding group led by Japanese fund Japan Industrial Partners (JIP) Inc presently includes domestic firms.
  • Most recently, Japanese chipmaker Rohm Co Ltd announced its plans to join the Toshiba buyout proposal.
  • The chipmaker plans to contribute about ¥300 billion from the proposed ¥2.2 trillion acquisition.
  • The report added that private equity investors are concerned about the deal's valuation, complexity, and political nature. The Japanese bidding consortium also wants to avoid triggering Chinese antitrust scrutiny by bringing in foreign investors.
  • The report points out the difficulty for Japanese stakeholders and overseas investors to align, especially where national security is a concern.
  • The Bloomberg report added that no final decisions had been made, and some funds could still find ways to back the deal, such as providing financing.
  • Earlier this month, Toshiba confirmed receiving a proposal from the JIP Consortium.
  • Toshiba deal is valued at about ¥2 trillion, including bank financing worth about ¥1.4 trillion. The JIP-led group has been in talks for a further ¥1 trillion of financing from around 20 potential co-investors.
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