Once a storied conglomerate, Toshiba has been weakened by accounting and governance scandals. Attempts to turn itself around have been overshadowed in recent years by discord between management and its many activist shareholders.
The consortium will put up about 1 trillion yen in equity, with the rest likely to come from bank loans, Kyodo said, adding that financing talks were underway and the offer value could change, depending on future movements of Toshiba’s stock price.
But one of the sources said the consortium is yet to narrow down details of the proposal, including valuation and financing.
Toshiba has declined to comment on the report.
It was not immediately clear how many bids Toshiba was seriously considering but the takeover contest is probably still an open race between Japan Industrial Partners and state-backed Japan Investment Corp, said Travis Lundy, a Quiddity Advisors analyst who publishes on the Smartkarma platform.
The two had previously joined forces to bid for Toshiba but have since gone their separate ways, sources have said.
Japan Investment Corp has since been in talks with private equity firm Bain Capital, one of several overseas funds that passed the first round of bidding, one of the sources said. Bain has declined to comment.
MBK Partners is also in talks with the state-backed fund, another source has said.
Toshiba and activist shareholders have been at odds over the direction of the company, with several large foreign funds pushing the conglomerate to consider private equity bids.
Tension peaked last year when a shareholder-commissioned investigation concluded that management had colluded with Japan’s trade ministry – which sees the company’s nuclear and defence technology as a strategic asset – to block overseas investors from gaining influence at its 2020 shareholder meeting.
“The only way to get rid of the activists is to buy them out,” Lundy said.