News

Tokyo Electric PowerCo., Japan’s largest utility, is considering joining a government-backed coalition to bid for semiconductor maker Toshiba corp.

The alliance is understood to have been formed by Japan Investment Corp, a government-backed Investment group, and JapanIndustrial Partners, a Japanese private equity fund. JIC and JIP formed an alliance because they did not have enough money of their own.

Tepco’s Japanese shares fell 6.58% as of press time Wednesday on the news. The market appears concerned about the impact a possible takeover would have on Tepco’s finances.

“This is not true,” Tepco spokesman Ryo Terada told reporters. Toshiba said it would not comment on bidders or the details of their proposals.

Toshiba said last month it had received 10 investment proposals, including eight non-binding take-private offers, along with capital and commercial alliance proposals. KKR, Blackstone Group lp, Bain Capital, Brookfield Asset Management, MBK Partners, Apollo Global Management and CVC Capital are among the potential bidders for Toshiba, according to people familiar with the matter.

Accounting and governance crises have dogged the 146-year-old industrial conglomerate since 2015. In November 2021, Toshiba announced a plan to split its business into three separate companies, and revised the plan to split into two in February 2022. But at an extraordinary general meeting in March, shareholders voted against management’s plan to split Toshiba in two. Toshiba is considering taking the company private after shareholders rejected the split and set up a special committee in April to seek advice.

The involvement of domestic funds is seen as key to winning government approval for a bid for Toshiba, as some of its key businesses — including defence equipment and nuclear power — are seen as strategically important to Japan.