The long-running crisis at Japan’s Toshiba
The logo of Toshiba Corp. is displayed atop of the company’s facility building in Kawasaki, Japan June 24, 2022. REUTERS/Issei Kato
TOKYO – Toshiba Corp’s board on Thursday accepted a buyout offer from a group led by private equity firm Japan Industrial Partners (JIP), ending months of speculation over whether the investors would be able to take it private.
The deal would potentially draw a line under the Japanese conglomerate’s recent troubled history. Here is a timeline of Toshiba‘ woes since 2015.
2015 – Toshiba discloses accounting malpractices across multiple divisions, which involved top management. It overstated pretax profit by 230 billion yen ($1.8 billion) over seven years.
Dec. 2016 – Toshiba says it will take a charge of several billion dollars related to a nuclear power plant construction company that U.S. unit Westinghouse Electric had bought a year earlier.
March 2017 – Westinghouse files for Chapter 11 bankruptcy. Faced with more than $6 billion in liabilities linked to Westinghouse, Toshiba decides to put prized chip unit Toshiba Memory up for sale.
Sept. 2017 – Toshiba agrees to sell the chip business to a consortium led by Bain Capital for $18 billion, while retaining a large stake.
The company is desperate to close the deal by the end of the financial year in March to help right its finances and avoid a potential delisting.
That is jeopardized by a prolonged dispute over the sale with Western Digital Corp, its partner in a chip joint venture. Antitrust reviews are expected to take months.
Dec. 2017 – Toshiba secures a $5.4 billion cash injection from more than 30 overseas investors, helping it avoid a delisting but bringing in prominent activist shareholders including Elliott Management, Third Point and Farallon. Dispute with Western Digital is settled.
Jan. 2020 – Toshiba finds fresh accounting irregularities at a wholly owned subsidiary.
July 2020 – Five director candidates nominated by activist shareholders get voted down at annual general meeting.
Sept. 2020 – Toshiba discloses more than 1,000 postal voting forms for its AGM went uncounted. The bank that counted the votes, Sumitomo Mitsui Trust Bank, later reveals widespread failure to count all valid votes at AGMs of client firms over past two decades.
March 2021 – Shareholders approve an independent investigation into allegations that investors were pressured ahead of the previous year’s AGM.
April 2021 – CVC Capital Partners makes an unsolicited $21 billion offer to take Toshiba private.
A week later, Toshiba‘s CEO resigns amid controversy over the CVC bid, perceived by some within company management as designed to shield him from activist shareholders.
Toshiba‘s subsequent dismissal of the CVC offer angers some activist shareholders.
June 10, 2021 – A shareholder-commissioned investigation concludes Toshiba colluded with Japan’s trade ministry – which sees Toshiba as a strategic asset – to block overseas investors from gaining influence at 2020 shareholder meeting.
June 25, 2021 – Shareholders oust board chairman Osamu Nagayama after critics accuse board of failing to address allegations of pressuring investors. Toshiba pledges to undertake a full review of assets and engage with potential investors.
Nov. 2021 – Toshiba says it will split into three companies, one for energy, one for infrastructure and the third to manage its Kioxia stake.
Feb. 2022 – Toshiba announces a new plan to split into two, spinning off only its devices unit.
March 1, 2022 – CEO Satoshi Tsunakawa resigns. Taro Shimada, a former Siemens AG executive who joined in 2018, appointed as interim CEO to proceed with the spin-off plan.
March 24, 2022 – Shareholders vote against spin-off plan. A separate motion backed by activist shareholders that called for the conglomerate to solicit buyout offers also fails to pass.
April 2022 – Toshiba sets up a special committee to resume a strategic review that could see it taken private.
May 13, 2022 – Ten potential investors express their interest. Under pressure from shareholders, Toshiba announces a special dividend of some $545 million.
June 2022 – Toshiba receives eight buyout proposals. Directors publicly trade criticism over governance and the nomination of hedge fund executives to its board. Shareholders later approve two activist directors, a historic shift.
July 2022 – Toshiba selects four bidders including private equity firms Bain Capital, CVC Capital Partners and a consortium involving JIP and state-backed Japan Investment Corp (JIC) to proceed to a second bidding round. JIC and JIP disagree over the proposal and decide not to pursue a bid together.
Oct. 2022 – The JIP-led consortium, involving a number of Japanese firms such as Orix Corp and Chubu Electric Power Co, is given preferred status.
Feb. 2023 – After months of speculation, Toshiba confirms that it has received a proposal from an all-Japanese group led by JIP, which sources said secured $10.6 billion in loan commitments.
March 23, 2023 – Toshiba‘s board accepts JIP’s 2 trillion yen tender offer at 4,620 yen a share, versus its last closing price of 4,213 yen.
($1 = 130.8500 yen)
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