Preferred bidder Japan Industrial Partners Inc. has moved closer to securing finances from Japanese banks on acquiring Toshiba Corp. This includes Sumitomo Mitsui Banking Corp and Mizuho Bank Ltd.
TOKYO, JAPAN - JULY 22: Toshiba Corporations, Tokyo headquarters is seen on July 22, 2015 in Tokyo, Japan. Toshiba Corporation President Hisao Tanaka and two other executives resigned July 21, over a $1.2billion accounting scandal. Chris McGrath/Getty Images
(Photo : Chris McGrath/Getty Images) TOKYO, JAPAN - JULY 22: Toshiba Corporations, Tokyo headquarters is seen on July 22, 2015 in Tokyo, Japan. Toshiba Corporation President Hisao Tanaka and two other executives resigned July 21, over a $1.2billion accounting scandal.
Acquiring Toshiba Corp.
Japan Industrial Partners Inc. has increased its chances of securing financing from Japanese banks to acquire Toshiba Corp. The company was considered the preferred bidder of the company since then.
These made Toshiba's main banks, including Sumitomo Mitsui Banking Corp and Mizuho Bank Ltd, more confident in JIP and its post-acquisition plans during the financing discussions.
Because of this news, Bloomberg reported that shares of Toshiba increased as much as 4.5%, garnering the biggest gain for the company since October, outperforming the Nikkei index with a 1.1% advance for the benchmark.
JIP, Sumitomo Mitsui Banking Corp, and Mizuho Bank all declined to comment regarding this matter. Toshiba's spokeswoman stated that they are unable to address these types of questions regarding applicants or co-investors as a general rule of the company.
Financing the Acquisition
JIP aims to secure financing commitments from banks this month at around 2.2 trillion yen ($16 billion), including debt. However, the decisions of how much each bank will finance the acquisition have not been decided. No clear dates were given by the sources regarding the finalized breakdown of finance.
If it will be successful before the year ends, this could be the largest acquisition in Asia. The initial plan on completing the deal was set for the end of March, but because of these delays in getting the banks' commitments on this acquisition, the company scrapped the estimated time.
As per Japan Times, the banks are not expected to make a decision until mid-December, which is later than the original plan. Toshiba set a deadline of November 7th for the financing to be secured.
Looking back on the announcement of the company purchasing Toshiba Corp, the company has come a long way, especially since it faced uncertainty last month with the delayed decisions.
According to Reuters' report, financial services firm Orix Corp, chip maker Rohm Co Ltd., and Japan Bank Co Ltd. are the rumored companies to be interested in joining JIP's consortium. Aside from the mentioned companies, global private equity firms that are also interested in the acquisition could also participate in the debt portion.
The group is also reported to negotiate with potential co-investors to back the acquisition, including Suzuki and Iwatani.
Meanwhile, government-supported Japan Investment Corp. has already been sidelined as the preferred bidder. JIC and JIP teamed up during the first round of bidding earlier this year, but this led to a disagreement, causing the two to form separate bids for the second round.
