Toshiba considers a buyout, shares surge

Toshiba considers a buyout, shares surge

Toshiba’s board is considering buyout offers. After the announcement, shares jumped nearly 5%.

On Thursday 21 April, Toshiba’s board hired a financial advisor to determine the future of the organisation. The Japanese conglomerate has been under pressure since the end of 2021. The board became discredited after an accounting scandal and the suppression of critical investors. Since then, investor confidence has been at an all-time low.

In order to regain confidence and increase the share price, the board proposed a break-up plan. Toshiba would split into three: an energy and infrastructure company, a device and storage company and a finance company. Several investment firms made bids, but the organisation held firm. Until the largest shareholders opposed the plan. They had little interest in the split. Shareholders believe that an acquisition would be the most profitable.

A vote forced Toshiba to halt the demerger plan at the beginning of April. Strategic options are limited. On Thursday, 21 April, Toshiba joined forces with Nomura Securities, a financial advisor. A buyout is on the table.

Share price

Following the announcement, Toshiba’s share price rose 5% to 5,400 yen (about 39 euros), its highest point since 2013. The timing was not left to chance. Several shareholders would like to see Toshiba in the hands of one or a few owners. A shareholder meeting is scheduled for June. The board is trying to keep up investor confidence.

The latter is proving difficult. Effissimo Capital Management, Toshiba’s largest shareholder, announced in March that it is willing to sell its shares to Bain Capital. However, Bain Capital has not made an offer. Effissimo’s announcement encourages Toshiba’s board to consider a sale.