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Business deals

CVC delays Toshiba buyout offer following CEO swap

Japanese group says no formal offer yet as of Friday

 CVC Capital Partners had made a tentative offer to take Toshiba private.   © Reuters

TOKYO -- CVC Capital Partners will postpone submitting a formal proposal to acquire Toshiba until further notice after the Japanese industrial group appointed a new CEO, Nikkei learned Friday.

The multinational fund offered to take Toshiba private through a $20 billion tender offer in a preliminary proposal on April 6, with plans to present a formal, detailed plan to the company about 10 days later.

But on Wednesday, Nobuaki Kurumatani stepped down as Toshiba's president and CEO and was replaced by Chairman Satoshi Tsunakawa. CVC believes that Toshiba's new leadership will need some time to settle in before it can make any decisions on a potential buyout.

Toshiba confirmed that it had not received any binding proposals from CVC as of Friday. It is not expected to discuss CVC's offer at a board meeting scheduled for Monday.

"We will carefully consider the offer once we receive detailed information," Osamu Nagayama, who chairs Toshiba's board of directors, had said April 9.

CVC had hoped to take Toshiba private partly in response to the company's rocky relations with activist investors under Kurumatani. But with Tsunakawa, who considers communication with shareholders a priority, now in charge, CVC does not see the upcoming board meeting as an appropriate time to discuss a potential privatization.

Tsunakawa had previously served as Toshiba's CEO from 2016 to 2018.

CVC also faces growing uncertainties on how to fund the potential deal. It had hoped to join forces with the state-backed Japan Investment Corp. and the Development Bank of Japan. But Toshiba's leadership change has thrown a wrench into its plans.

The delay could affect the plans of other investment funds also considering investing in or acquiring Toshiba. 

Prior to the report of CVC's offer postponement, Toshiba's stock fell on Friday on speculation that the buyout deal would likely fall through. The stock ended the day down 295 yen, or 6%, at 4,600 yen. 

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