Acquisition Expected to Reach $30 Trillion
Leading Consortium Faces Two-Way Battle Between JIC and JIP
[Asia Economy Reporter Kwangho Lee] MBK Partners, the largest private equity fund (PEF) manager in Northeast Asia, is teaming up with Japan’s sovereign wealth fund, Japan Investment Corporation (JIC), to enter the bidding for Toshiba.
According to investment banking (IB) industry sources and major foreign media including Bloomberg on the 4th, MBK Partners has joined the consortium led by JIC, which was an existing candidate for acquiring Toshiba, to participate in the bidding. It is reported that not only MBK Partners but also the global PEF Bain Capital have joined the JIC consortium.
Kim Byung-joo, Chairman of MBK Partners, expressed an aggressive investment intention in his annual letter at the beginning of the year, stating, "Upheaval will rather bring investment opportunities," and "The golden age of investment will continue this year as well."
Toshiba plans to proceed with the main bidding process soon and select the final acquirer. Besides the JIC consortium, which MBK Partners is participating in, Japan Industrial Partners (JIP), composed of local Japanese companies, UK-based CVC Capital Partners, and Brookfield, a Canadian infrastructure-focused fund, have also been selected as qualified acquisition candidates (shortlist).
During the preliminary bidding, JIC had planned to form a consortium with JIP, but due to differing opinions during the process, they decided to part ways. Instead, JIC decided to form a consortium with Bain Capital. With MBK joining the consortium, the group appears to have strengthened its position.
Earlier, Toshiba proposed a company split plan in April to overcome management difficulties. However, existing shareholders composed of activist funds rejected it, leading to the decision to proceed with a public sale.
Toshiba, listed on the Tokyo Stock Exchange, has seen its stock price rise about 10% this year, forming a market capitalization of approximately $15.6 billion (22 trillion KRW). Considering this, the industry expects MBK Partners to make an investment in the trillions of won range.
The acquisition price for Toshiba, including a management control premium, is expected to reach 3 trillion yen. The company’s recent market capitalization stands at 2.23 trillion yen (approximately 22 trillion KRW).
Toshiba operates businesses including power generation facilities such as nuclear and thermal power, transportation systems, elevators and air conditioners, and hard disk drives (HDD). Since it handles nuclear business, it is classified as a company possessing national core technology, and it is anticipated that the Japanese government’s approval will be required during the overseas sale process. For this reason, it is expected that the JIC consortium composed of Japanese capital and the competing JIP consortium will engage in a final competition in the acquisition battle.
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