The company agreed to sell the premium asset division to a consortium led by Bain Capital to avoid the company's stock being delisted after it suffered billions of dollars in losses on its nuclear business, but according to informed sources, China The deal has not yet been approved and the Chinese government regulators are unlikely to review the results before the deadline of March 31. This may give Toshiba a chance to negotiate more favorable terms by adding 2 trillion yen 18.6 billion US dollars) sales price increase, that the price may be undervalued by the Toshibagels billions of dollars.Compared with the second half of last year, Toshiba is now in a more stable state.
Damian Thong, a science and technology analyst at Macquarie Group Ltd in Tokyo, said there is no timetable for China to review Toshiba's chip sales and it seems unlikely that a censorship result will be released by the deadline.
Toshiba spokeswoman Midori Hara said the company is trying to complete the sale by the deadline March 31. Bain Capital declined to comment.
Toshiba reserves the right to terminate the transaction if it can not be completed by March 31. Although the company was in a hurry to raise funds last year, it now no longer needs the funds to avoid a delisting and the company's executives now consider it to be " Grace's deal is well below market, and Toshiba may face inquiries on the issue Wednesday when it announces its quarterly earnings.
The current sale terms are the result of a frenzied negotiation over eight months, with Hon Hai Precision Industry Co. and Broadcom Ltd. bidding 2.5 trillion yen or more Of the acquisition bid, but subsequently gave up the acquisition plan under political resistance.Finally, by defending the legal challenge from Toshiba manufacturing partner West Digital Corp. and won the support of Toshiba's most important customer Apple, Bain Capital won the bid, with people familiar with the matter claiming that the chip division of Toshiba may receive $ 22 billion to $ 24 billion in public auctions.
Toshiba has seen a turnaround in conditions since the transaction was put into negotiation, boosting its capital by selling 410 billion yen of nuclear assets and issuing 600 billion yen of new shares in December. At the same time, the company Memory chip business has become more valuable, the business in the first half operating profit of 205 billion yen, accounting for about 88% of the company's total operating profit.
'They really have no reason to sell this business anymore, only the contract has been signed,' said Hideki Yasuda, an analyst at Ace Research Institute. 'From the point of view of the shareholder, this chip business is left inside the company Is the best solution. '
If the current deal is abolished, Toshiba has at least three options. Toshiba to raise prices to negotiate with the Bain Capital consortium; Toshiba can make the memory chip companies listed to raise funds and to increase their visibility; or to retain the business, the use of Its steady profits financed investment.
Any changes will involve a large group of stakeholders, and insiders said Sumitomo Mitsui and Mizuho Financial Group Inc., Toshiba's major lenders, will play a key role in any decision and will not Easily change their support for the current terms of the transaction.The two banks also promised to provide 600 billion yen in loans to the acquired entity if the transaction was approved by a Chinese regulatory body.Margley Group's Damian Tong Said that while the renegotiation of the terms or the listing of the business may bring higher returns, the bank's primary interest is to reduce the negative risks.
The increase in new shareholders of Toshiba may make it more powerful to support the renegotiation of the deal, and these new shareholders play a more active role in Toshiba's affairs, and the issuance of new shares last December brought the total number of funds holding Toshiba shares to 60 Home, a total of one-third of Toshiba holding equity, these funds include David Einhorn's Greenlight Capital, Daniel Leeb (Daniel Loeb) Third Point and Effissimo Capital Management Pte.
Toshiba, an investor involved in equity financing in December last year, said through renegotiations, Toshiba may increase the value of 200 billion yen.Operators who are not willing to be named revealed that investors plan to use the Toshiba shareholders meeting scheduled for the end of June to come Promote better deals.
'Their impact is limited because they are not powerful agents,' said Damien Tong of the Macquarie Group, 'but some of the voices of shareholders may be on the side of internal opponents to increase the deal's completion Difficulty.