Toshiba Corp’s auction was supposed to ignite a race for top-dollar bids among global private equity firms. Instead, it brought months of uncertainty and a solitary, scaled-back offer from the company’s business partners in Japan. | Reuters
Major activist shareholders are expected to exit, people familiar with the matter said. Some, including top shareholder Effissimo Capital Management, could make huge profits, having bought their shares cheaply in a 2017 bailout.
Toshiba’s management, including CEO Taro Shimada, will stay on, while the government keeps Toshiba’s sensitive defense and nuclear technologies in Japanese hands. Now top activist shareholders are tired of the drama and eager to exit, according to some of the people, even at the “shockingly low” price, one of them said.
Some global private equity firms including KKR & Co backed off early, in part due to concerns about antitrust hurdles and government scrutiny of sensitive technology. Bain in 2018 bought a majority stake in Toshiba’s most important asset, its memory chip business, later renaming it Kioxia Holdings.The drawn-out process meant Toshiba missed the window for an “ideal valuation” when tech stocks were still going strong, LightStream’s Kato said.“If management stays and pursues the current strategy, we can’t see how they would improve the company,” one banker said late last year.
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