Japan’s state-backed JIC hires SMBC Nikko for potential Toshiba deal -sources

The logo of Toshiba Corp. is seen at the company’s facility in Kawasaki, Japan June 10, 2021. REUTERS/Kim Kyung-Hoon

Japan’s state-backed JIC hires SMBC Nikko for potential Toshiba deal -sources

State-backed Japan Investment Corp (JIC) has hired SMBC Nikko Securities as its financial adviser for its pursuit of a potential equity investment in conglomerate Toshiba Corp (6502.T), two people familiar with the matter told Reuters.

Toshiba said this month it had received eight initial buyout proposals as well as two proposals for capital alliances that would see it remain listed. It plans to shortlist bidders soon so that selected suitors can start due diligence from July.

The company’s shareholders on Tuesday voted in two board directors from activist hedge fund investors at its annual general meeting – an inclusion that is expected to add momentum to its exploration of potential buyout deals. read more

Japanese funds, including JIC, and a number of strategic players are looking to see how they can participate in the deal, Reuters reported last week, citing people familiar with the matter. read more

It was not immediately clear whether JIC is planning to join hands with a global private equity fund or form its own consortium, but the two sources said that the fund is currently seeking financing for a potential deal.

JIC declined to comment, while an SMBC Nikko spokesperson said the company would not comment on individual deals. Toshiba said it would not comment on details of the bidders and their proposals.

Sources told Reuters last week that at least one bidder is considering offering up to 7,000 yen per share to take Toshiba private, valuing a potential deal at up to $22 billion.

This year SMBC Nikko and six former executives were indicted on market manipulation charges concerning the purchase of 10 individual stocks, accused of seeking to push up stock prices and ensure block trade deals in them did not fall through.

According to one of the two sources and a separate source familiar with the situation, SMBC Nikko was not chosen by Toshiba as a financial adviser due to the scandal. The SMBC spokesperson and Toshiba also declined to comment on the conglomerate’s choice of financial advisers.

In response to the scandal, SMBC Nikko said last week it would take seriously an investigation report conducted by outside lawyers that found there was inappropriate and unfair conduct.

Reporting by Makiko Yamazaki in Tokyo and Kane Wu in Hong Kong; Editing by Edwina Gibbs

This article was originally published by Reuters.

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