Exclusive-Japanese buyout firms JIP, Polaris considering bids for Toshiba – sources

By Makiko Yamazaki and Scott Murdoch

TOKYO/HONG KONG (Reuters) – Japanese buyout firms Japan Industrial Partners (JIP) and Polaris Capital Group are each considering participating in bids for Toshiba Corp, two people familiar with the matter said on Friday.

Toshiba, which has been bedevilled by accounting and governance crises since 2015, set up a special committee last month to explore strategic options, including potential deals to go private, after shareholders voted down a management-backed restructuring plan.

Both funds, far smaller than some global private equity firms, would need to team up with others, the sources said. The participation of local funds is seen as critical as some of Toshiba’s assets – including defence equipment and nuclear power – are seen as strategically important in Japan.

The sources declined to be identified as the matter is private.

It was not immediately clear if JIP and Polaris were already collaborating with other funds.

Although not well known overseas, the pair have been involved in corporate carve outs and spin offs from Japanese conglomerates.

JIP, for example, bought Olympus’ camera business last year and Sony Group’s laptop computer business in 2014. Polaris acquired Fujitsu’s mobile phone business in 2018.

JIP could not be reached immediately for comment. A representative for Polaris said it is true that the firm is considering the opportunity, but declined to comment further.

Toshiba said 10 potential investors had signed confidentiality pledges, without identifying them. The deadline for initial proposals is Monday.

A spokesperson for Toshiba said the company “intends to provide transparent updates on the process to our shareholders, and will publicly announce the number of non-binding proposals received from potential partners and the overview of proposed deal structures before the annual shareholders’ meeting in June”.

The Japanese government will not block foreign investors from buying industrial giants such as Toshiba provided they comply with rules that govern the handling of sensitive technology, Takayuki Kobayashi, Japan’s economic security minister, told Reuters recently.

(Reporting by Makiko Yamazaki and Scott Murdoch; Editing by Kirsten Donovan)