JIP is reported to have asked over ten Japanese companies, including Chubu Electric, Orix Corp, Nippon Life Insurance Co, Toray Industiries and Central Japan Railway Co to participate in a consortium.
The other groups fighting to buy Toshiba are the state-backed Japan Investment Company (JIC) in a consortium with MBK Partners and Bain Capital and, thirdly, CVC Capital Partners combined with Canada’s Brookfield Asset Management.
JIP and JIC had been partnered in a bid but the partnership broke up and the alignments re-organised.
JIP now has one month to complete negotiations which will be mainly about price and funding. Toshiba’s market cap is around $15 billion and it is expected that a successful bid will have to be around $17 billion.
Because Toshiba is involved in nuclear power, which Japan designates as a “core” strategic business sector under its Foreign Exchange and Foreign Trade Act, any buyout will be subject to strict government scrutiny. Toshiba and JIP are expected to discuss how the potential buyout could clear regulatory hurdles
JIP is now trying to drum up local support to raise the money via what is intended to be a largely Japanese group of investors.
