JIP-led consortium considering 2.4 trillion yen bid for Toshiba

A consortium led by investment fund Japan Industrial Partners (JIP) is considering a bid for Toshiba at a valuation of 2.4 trillion yen ($16.1 billion) in what could be Asia's biggest takeover this year, according to Bloomberg.

At a meeting with Sumitomo Mitsui and other banks on the 20th, Toshiba announced that JIP valued Toshiba at about 2.4 trillion yen and asked them to provide financing support, people familiar with the matter said. According to calculations, the 2.4 trillion yen bid would be worth about 5,541 yen per share. JIP plans to provide 1 trillion yen in cash while seeking a total of 1.4 trillion yen in financing from banks and committed lines of credit for 200 billion yen in working capital.

The JIP-led consortium had previously secured Toshiba's preferred bidder status. JIP's proposed takeover offer is worth less than 2.6 trillion yen ($17.2 billion), according to people familiar with the matter. Today's 2.4 trillion yen valuation is even lower, suggesting that Toshiba's premium today may not be as high as investors think.

It is understood that JIP has been inviting Japanese companies including ORIX and Chubu Power to join the consortium, and the company has been given a month to make detailed proposals including financing, one of which is financing. The offer could change as a consortium led by the government-backed JIC is preparing a bid and JIP has not finalized the equity commitments of its partners, the people said.