Japan state-backed fund said to be in talks with Bain Capital for Toshiba buyout

A plant of Toshiba Memory Corp. in Mie, Japan. Photographer: Shingo Kawamoto/Bloomberg

A statebacked Japanese fund is in talks with private equity firm Bain Capital to form a consortium and bid for Toshiba, after breaking off from its previous partner, the Nikkei newspaper reported on Wednesday.

It would mark a second proposal for Toshiba from statebacked Japan Investment Corp. The fund had previously joined forces with private equity firm Japan Industrial Partners and their bid had made it past the first round of bidding.

However, Japan Investment Corp and Japan Industrial Partners have since decided not to pursue a bid together, both the Nikkei and Kyodo News said.

Japan Investment Corp, which is bidding to take Toshiba private, aims to file a proposal as early as next month, the Nikkei said. It hopes to draw overseas investors through mezzanine financing and other instruments, the newspaper said.

Reuters was not immediately able to reach Bain or Japan Investment Corp for comment.

Conglomerate Toshiba is looking at a number of restructuring plans, including going private.

Kyodo said private equity firm Japan Industrial Partners and the statebacked fund disagreed over the proposal, prompting the fund to consider a new partnership with overseas funds that also passed Toshiba‘s first bidding round.

Those include U.S.-based Bain and UK-based CVC Capital Partners.

Meanwhile, Japan Industrial Partners has approached more than 10 Japanese companies, including Chubu Electric, Orix Corp and Central Japan Railway Co (JR Central)  to participate in its consortium, the Nikkei newspaper reported on Sunday.

Japan Industrial Partners also contacted Nippon Life Insurance Co to join the consortium for Toshiba‘s restructuring plan, Kyodo reported on Wednesday.

A spokesperson for Nippon Life Insurance Co said it had been approached by JIP but said: “nothing is decided” about joining JIP’s Toshiba restructuring bid.

Reuters

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