Japan state-backed fund in talks with Bain on Toshiba buy-out [Private Equity Insights]

A state-backed Japanese fund is in talks with private equity firm Bain Capital to form a consortium and bid for Toshiba, after breaking off from its previous partner

The fund had previously joined forces with private equity firm Japan Industrial Partners and their bid had made it past the first round of bidding. However, Japan Investment Corp and Japan Industrial Partners have since decided not to pursue a bid together.

In July, four groups advanced to the second round of bidding for Toshiba’s restructuring plans, including JIP. Those groups are now proceeding with the due diligence of the struggling company, and are likely to make binding offers as early as this month.

JIP is now calling for Japanese companies to form a mostly domestic alliance. Each company could invest up to 100bn yen ($695m).

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Japan Investment Corp, which is bidding to take Toshiba private, aims to file a proposal as early as next month. It hopes to draw overseas investors through mezzanine financing and other instruments.

Conglomerate Toshiba is looking at a number of restructuring plans, including going private.

Private equity firm Japan Industrial Partners and the state-backed fund disagreed over the proposal, prompting the fund to consider a new partnership with overseas funds that also passed Toshiba’s first bidding round.

Those include U.S.-based Bain and UK-based CVC Capital Partners.

Source: Reuters