CVC Capital Partners Offers Over $20 Billion to Take Toshiba Private, Shares Soar 18%, Analysts Skeptical

CVC Capital Partners has offered over $20 billion to take the Japanese industrial conglomerate Toshiba (OTC: TOSYY) private.

The company was valued at $15.8 billion yesterday while Nikkei says the CVC offer is based on a 30% premium based on Tuesday’s closing share price of 3,830 yen. The Japanese firm is now considering the proposal, it said in a statement.

“Toshiba received an initial proposal yesterday, and will ask for further clarification and give it careful consideration,” Toshiba said in a statement.

The offer from CVC comes at a time when major shareholders have questioned corporate governance. At a meeting in March, shareholders approved a proposal coming from Effissimo Capital Management to appoint independent investigators to determine whether voting at one of the previous shareholders’ meetings was fair.

However, industry analysts are skeptical the deal will go ahead, even if CVC improves its offer.

“We believe that current shareholders, especially activists, will want a rather steep price,” LightStream Research analyst Mio Kato said in a note.

The government of Japan is likely to make sure that the infrastructure work Toshiba is doing is not affected, said Chief Cabinet Secretary Katsunobu Kato.

“Even though it faced bankruptcy Toshiba is still one of Japan’s leading companies. It also has many businesses linked to government policies, so it seems a little unrealistic for it to become a foreign-owned private company,” said Takuro Hayashi, an analyst at Iwai Cosmo Securities.

Shares of Toshiba opened over 18% higher this morning in Tokyo before the trading was halted.

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