By Kosaku Narioka
TOKYO—Toshiba Corp. said it planned to buy back shares worth about ¥700 billion ($6.3 billion), the largest buyback from the market on record in Japan, appealing to foreign shareholders who took a big stake last year.
Toshiba /zigman2/quotes/204149068/composite TOSYY +0.24% shares rose 6.6% Wednesday on the news. The company will use proceeds from an $18 billion deal to sell its flash-memory unit to a consortium led by Bain Capital, which closed June 1.
Foreign funds such as Third Point LLC and Greenlight Capital Inc. have taken a growing role at the Japanese conglomerate since it raised ¥600 billion last December to bolster its balance sheet. At the time, it wasn’t clear whether it could complete the chip-unit sale, and the company needed to bolster its capital to avoid de-listing at the Tokyo Stock Exchange.
Now Toshiba’s finances are more stable, and with Wednesday’s share-price rise, foreign investors who took part in the capital raising are sitting on a 28% gain. Foreign shareholders accounted for 72% of total shares at Toshiba as of March 31, according to the company.
An expanded version of this report appears on WSJ.com .
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