Toshiba's shares rise as it explores potential buyout

Japanese electronics company has been locked in a years-long battle with some of its major shareholders over its direction

Toshiba has hired Nomura Securities as a financial adviser on strategic alternatives, including a potential privatisation. Reuters

Toshiba's shares jumped by about 5 per cent in Tokyo trade on Friday after the embattled Japanese conglomerate said it would solicit deal offers, including on a potential buyout, bolstering hopes of a lucrative exit for its hedge fund investors.

The company, which has been locked in a years-long battle with some of its major shareholders over its direction, said on Thursday it had hired Nomura Securities as a financial adviser on strategic alternatives, including a potential privatisation.

Toshiba's shares were up 4.3 per cent at ¥5,381 ($41.94) at 6.30am UAE time.

The timing of the announcement — shortly before an annual general meeting expected in June — is probably the result of the continued pressure the company has faced from investors, who have called in public, and repeatedly in private, for a consideration of a buyout.

Top shareholder Effissimo Capital Management said last month that it had agreed to sell its stake to Bain Capital if the US private equity firm launched a tender offer, a move that was seen as potentially putting pressure on Toshiba to revive buyout talks.

Bain has said nothing had been decided about a takeover bid, although the Nikkei business daily reported the firm was planning to team up with Japanese investment funds to make an offer.

The participation of local funds has been considered as critical, given that some of Toshiba's assets — including defence equipment and nuclear power — are perceived as strategically important in Japan.

The move comes after its shareholders last month voted down a company proposal to spin off its devices unit.