TOKYO -- Toshiba's board on Thursday voted in favor of a 2 trillion yen ($15.3 billion) buyout led by Japan Industrial Partners (JIP), setting the troubled industrial group on a path to go private if the bid succeeds.
The tender offer of 4,620 yen per share requires investors to tender at least two-thirds of outstanding shares to succeed. The Japanese blue chip would later delist from the Tokyo Stock Exchange.
The decision marks a milestone in Toshiba's turnaround efforts, which have gone through ups and downs since the company first received a buyout offer from private equity firm CVC Capital Partners in April 2021.
The hope is that having a single owner will improve decision-making at a company where business strategy is now swayed by activist investors.
After discussions by a special committee composed of outside directors, the 12-member board accepted the JIP proposal, concluding that the offer would enhance Toshiba's corporate value, the company said.
Nikkei had earlier reported that Toshiba's board was poised to vote in favor of the offer.
The consortium will now proceed with antitrust and other regulatory reviews in countries including the U.S., the U.K. and Germany. The tender offer is expected to begin in late July.
The offer price is 10% higher than Thursday's closing share price of 4,213 yen. The premium is bigger when compared to the low 3,000 yen range where the stock was trading before the CVC offer came to light.
Besides a JIP investment fund, 17 Japanese companies -- including financial services group Orix, chipmaker Rohm and Chubu Electric Power -- and six domestic financial institutions, along with foreign investors, will hold stakes in the entity to be established for the acquisition. This is on top of other forms of funding such as preferred shares and loans.
Last April, Toshiba began soliciting restructuring proposals. JIP, which obtained preferential negotiating rights, submitted a takeover offer in November. After receiving loan commitments from financial institutions, it submitted a final proposal in February.
Talks on the earlier takeover bid by CVC broke down. In November 2021, Toshiba announced a plan to split the entire group into three companies as a measure to increase its value.
In February 2022, that plan was revised to a two-way split that was put before an extraordinary shareholders meeting one month later. But a majority of shareholders rejected the plan. Going private then became the main option for restructuring.
In 2015, Toshiba fell into financial crisis when accounting irregularities surfaced and its U.S. nuclear power plant subsidiary suffered huge losses. The company in 2017 raised about 600 billion yen in fresh capital to avoid two consecutive years of negative net worth, which would have put it at risk of delisting.
Multiple activist investors became Toshiba shareholders as a result of that fundraising