UBS Group (UBS) stock prices were down incrementally by 2.07% as of the market closing on May 11th, 2021, bringing the price per share down to USD$15.11 at the end of the trading day.
UBS to Collaborate with Toshiba
UBS is set to be appointed as financial advisor by Toshiba Corp to work on a strategic review for the Japanese tech giant as it faces a potential private equity bidding war. April of the fiscal year 2021 saw the company become the target of a potential takeover bid and management has since been wary of further forthcoming bids.
Competition for UBS
Thus far, various investment banks have pitched to independent directors of Toshiba for a shot at the advisory role, with the company aiming to facilitate transparency around its decision-making with the appointment of advisors. As such, the board is appointing financial and legal advisors independently, while strategically exploring ways to increase the company’s corporate value from an independent standpoint.
Role as Financial Advisor
Should UBS be appointed as a financial advisor, it will serve a different role from Goldman Sachs, which is already associated with the Toshiba management team as their active defence advisor. As financial advisor, UBS will develop a communication channel with Toshiba’s shareholders. A pending decision is expected soon, possibly in conjunction with the company’s earnings briefing on May 14th 2021.
CVC Initiates Bidding Snowball Effect
After the USD$20 billion buyout bid proposed by CVC Capital Partners in April of the fiscal year 2021, Toshiba has faced increased calls from leading shareholders to actively seek out offers from potential suitors and undergo a strategic review. The deal with CVC is still up in the air, however, after Toshiba dismissed the bid as lacking in substance.
Brewing Bidding War
The U.S. buyout firm Bain Capital is reported to be exploring options to propose a bid to take Toshiba private. Bain Capital entered into discussions with banks to secure the funding it would need for a potential deal in April 2021. KKR & Co, Inc., and Brookfield Asset Management have also indicated an interest in Toshiba, as have several private equity funds.
Future Outlook for UBS
With so many company’s vying for a chance to privatize Toshiba, the urgency of the appointment of a financial advisor grows more urgent. With a promising outlook for UBS, current and potential investors are hopeful that this opportunity will offer the company a chance to leverage its resources and further consolidate its already expansive footprint in the market.