Canon (NYSE:CAJ) beat out Fujifilm Holdings (TSE:4901) for the exclusive right to negotiate with Toshiba (TYO:6502) for its medical device business, the embattled Japanese conglomerate said today.
“Toshiba has carried out a close evaluation of the overall proposals received from companies that expressed an interest in acquiring [Toshiba Medical Systems Corp.], including their appraisal of TMSC’s value and the feasibility of successfully completing the transaction, and determined that the proposal from Canon Inc. is superior to that of the other companies,” Toshiba said. “The effective period for the exclusive negotiating rights is to March 18, 2016. Toshiba will continue discussions with Canon Inc. during that period, toward reaching final agreement.”
Last week the Wall Street Journal reported that Fujifilm was “eager to buy a 100% stake and had an edge,” citing a source who was familiar with the matter. The price for Toshiba Medical Systems could reach as much as $6 billion, after the company in February announced plans to sell its entire medical equipment unit rather than just a controlling stake. A bidding war soon developed among a slew of private equity players and rival corporations. Toshiba has also said that it will either shut down or transfer all of its other healthcare businesses by the end of March.
A deal would provide much-needed liquidity for Toshiba, which is facing mounting restructuring costs after a $1.3 billion accounting scandal. The rising costs prompted Toshiba’s management to pursue the sale of the entire business for as much as $5.75 billion (¥650 billion), much higher than the initial estimate of $3.5 billion to $4.4 billion (¥400 billion to ¥500 billion).
Toshiba Medical Systems put up sales of $3.59 billion (¥405.6 billion) during fiscal 2015, which ended in March of that year.
The post Canon wins exclusive negotiating rights for Toshiba Medical appeared first on MassDevice.
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