Industrial and technology concern Toshiba will “support” the takeover bid of a Japanese consortium led by the JIP Group. The board of the Japanese company confirmed this in a statement on Thursday.
Earlier, the Bloomberg news agency and business newspaper Nikkei reported, based on sources, that the board of directors would have approved the offer of approximately 2 trillion yen, the equivalent of more than 14 billion euros.
The move may end a very troubled period in the more than 140-year history of the well-known Japanese company. However, the board does not appear to recommend the offer to shareholders. “At this time, the board is expressing support for the takeover bid if it is initiated. However, the board also passed a resolution not to recommend it at this time,” the statement reads.
A group of about 20 Japanese companies, including Orix, Rohm and Chubu Electric Power, are participating in the acquisition led by Japanese private investor Japan Industrial Partners (JIP). Scandals have plagued Toshiba for years. For example, in 2015, there was accounting fraud, and two years later, a subsidiary for nuclear energy went bankrupt. As a result, the company was forced to sell its memory chip division and issue shares that foreign investors mainly bought.
Last year, however, it came to light that board members collaborated with the Japanese government to exclude activist foreign shareholders. Since then, Toshiba’s shareholders and board have been at loggerheads over the company’s future. Foreign investors were also reportedly interested in acquiring Toshiba, but the Japanese government wanted to keep key technologies and parts of Toshiba out of foreign hands.
For example, Toshiba’s nuclear energy activities are considered to be of great importance to Japan’s national security. Toshiba is also involved in decommissioning the Fukushima Dai-Ichi nuclear power plant, which was destroyed by the 2011 earthquake and tsunami, making it difficult for the government to accept a transfer of ownership to a foreign party. Early last year, shareholders also rejected a management proposal to split the company. In October 2022, JIP was finally chosen as the preferred bidder.