Toshiba to Become Private?

The board of directors and the Special Committee of Toshiba Corporation met and resolved to solicit proposals on strategic alternatives (including privatization) from potential investors and sponsors as its potential partners through engagement with them in order to enhance the company’s corporate value.

As announced in the “Notice on Establishment of the Special Committee” dated April 7, 2022, it resolved to establish a Special Committee on the same date to engage with potential investors and sponsors and explore strategic alternatives.

The solicitation of proposals from potential investors and sponsors to be firm’s partners is intended, as part of the evaluation of such strategic alternatives, to further advance the engagement with private equity funds that the now-dissolved Strategic Review Committee of the board of directors conducted from August to November 2021 and to receive the best and more specific proposals.

The company has retained Nomura Securities Co., Ltd., as financial advisor and Nishimura & Asahi as legal advisor. It will further reinforce external advisors as necessary. In addition, the board and the Special Committee has independently retained UBS Securities Japan Co., Ltd., as financial advisor and Nagashima Ohno & Tsunematsu as legal advisor in order to be advised independently from the management team.

Following this resolution, the company plans to receive a confidentiality pledge from potential investors and sponsors as its potential partners, and provide detailed information on the company’s business and finance and hold discussions in a timely manner with a view to to receiving non-binding proposals on strategic alternatives.

Toshiba will, after receiving feasible proposals that would contribute to enhance the company’s corporate value from potential investors and sponsors, evaluate the financing arrangements and the certainty of each transaction being actually implemented, including the likelihood of each transaction to be approved by the authorities under competition laws and national securities laws such as the Foreign
Exchange and Foreign Trade Act of Japan, and select potential investors and sponsors who will be given the opportunity of a due diligence promptly after the Annual General Meeting of Shareholders for the 183rd Fiscal Year (the AGM).

Following that, the company expects to receive legally binding proposals from those potential investors and sponsors.

In light of the above, upon completion of the non-binding phase of the evaluation process, which the company expects will take place before the AGM of Shareholders, we will publicly announce the number of the non-binding proposals received and the nature of deal structures offered therein. Further, beyond the AGM, upon determination of the best proposal as a strategic alternative after evaluating the legally binding proposals received from potential investors and sponsors, the company plans to make a public announcement on the reason for such determination based on, among other things, the prices for, and prerequisite conditions to the execution of, the transaction proposed by the potential investors and sponsors who submit such legally binding proposals, with the names of those potential investors and sponsors other than the one who submitted the best proposal anonymized.