In a significant development for Japan’s corporate landscape, the beleaguered electronics and energy behemoth, Toshiba, announced on Thursday that the 2 trillion yen ($14 billion) tender offer by a consortium of Japanese firms has been successfully completed. The move paves the way for Toshiba’s delisting from the Tokyo Stock Exchange, drawing a curtain on its over 70-year history as a publicly listed entity. The tender offer, which saw the acquisition of 78.65% of Toshiba’s shares, was led by its new parent company and largest shareholder, TBJH Inc.
The transition to TBJH Inc., however, remains subject to shareholder approval, with a meeting slated for November. Post-delisting, Toshiba aims to turn a new leaf, with CEO Taro Shimada stating that the company will "do the right thing" to enhance its value. Toshiba, once a symbol of Japan’s technological might with a range of products from rice cookers to laptops, has grappled with an accounting scandal and challenges in its nuclear energy business, including the costly decommissioning of the Fukushima nuclear power plant. The takeover, orchestrated by a consortium of Japanese banks and major companies known as Japan Industrial Partners, was seen by Toshiba’s board as the last opportunity for a turnaround.
Toshiba’s $14 Billion Tender Offer Completed, Paving Way for Delisting
Toshiba Corporation, the beleaguered Japanese electronics and energy giant, has announced the completion of a 2 trillion yen ($14 billion) tender offer by a Japanese consortium. The successful bid, which saw 78.65% of the shares bought, surpassing the minimum required, sets the stage for the company to be delisted from the Tokyo Stock Exchange.
Parent Company Transition and Delisting
Toshiba will be transitioning to its new parent company, TBJH Inc., which also happens to be its largest shareholder. This transition, scheduled for September 27, is still pending shareholder approval. A shareholders’ meeting has been set for November. The delisting from the Tokyo Stock Exchange will follow shortly after, ending Toshiba’s over seven-decade history as a listed company.
Taro Shimada, Toshiba’s CEO, expressed optimism about the future, stating, “Toshiba Group will now take a major step toward a new future with a new shareholder.” He assured that the company, even after privatization, will continue to strive to boost its value.
A Rocky Past and Uncertain Future
Toshiba has been grappling with a series of challenges, including an extensive accounting scandal that surfaced in 2015 and issues related to its nuclear energy business. The company also has the expensive and complex task of decommissioning the Fukushima nuclear power plant in northern Japan, following the 2011 tsunami-triggered meltdowns.
The consortium-led takeover, which Toshiba’s board accepted in March, was seen as a final opportunity for the company to turn around its fortunes. Nevertheless, some analysts remain skeptical about Toshiba’s return to profitability, even with the delisting.
Financial Performance and Stakeholder Concerns
Toshiba’s shares were up 0.2% at 4,604 yen ($31) on Thursday. However, the company reported a loss of 25 billion yen ($169 million) for the April-June quarter on sales of 704 billion yen ($5 billion), down nearly 5% from the previous year.
The company has also faced criticism from overseas activist investors, who hold a significant portion of Toshiba’s shares and have expressed dissatisfaction about the bid.
Takeaways
The completion of Toshiba’s $14 billion tender offer signifies a crucial turning point in the company’s history. While the move towards privatization offers a glimmer of hope for the struggling giant, significant challenges lie ahead, including the costly decommissioning of the Fukushima nuclear power plant and delivering value to its shareholders. It remains to be seen how Toshiba navigates these challenges in its quest to return to profitability.
