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With a recent buyout offer for Toshiba Corp. from a British private equity firm apparently hitting a snag, a bidding war involving other investors may break out for the industrial conglomerate, industry experts say.

Investor interest in the growth potential of some of Toshiba’s businesses, such as chipmaking and infrastructure systems, means the company is likely to face continued pressure to streamline its wide-ranging operations, they say.

Toshiba’s management rift widened after CVC Capital Partners made a buyout offer worth over $20 billion (about ¥2.18 trillion), leading its board members to believe president and CEO Nobuaki Kurumatani, once a CVC executive, was pulling strings to fend off pressure from activist shareholders.

Toshiba said Wednesday Kurumatani, who has led the company since 2018, offered to resign. He said in a statement he wants to take some time for himself after achieving the company’s turnaround without making any reference to the CVC proposal.

Osamu Nagayama, chairman of Toshiba’s board, confronted Kurumatani in the boardroom and expressed displeasure with CVC’s buyout offer, sources with knowledge of the matter have said.

Nagayama and some other board members are believed to have raised questions about Kurumatani’s stance of preventing activist shareholders from wielding influence.

Aiming to block CVC’s acquisition plans and keep Toshiba listed on the Tokyo bourse, the conglomerate’s executives asked creditor banks not to provide funding to the private equity firm for a planned buyout, according to people close to the matter.

CVC had previously planned to submit a detailed proposal in 10 days after sending its initial plan to Toshiba on April 6, while seeking cooperation from the Development Bank of Japan and Japan Investment Corp., a private-public sector fund, other sources have said.

But CVC did not deliver the formal offer by Friday, as it was seemingly monitoring the situation after Kurumatani’s resignation with the possibility of launching a hostile takeover bid.

American global investment firm Kohlberg Kravis Roberts & Co. and Canadian investment giant Brookfield Asset Management Inc. reportedly plan to submit buyout proposals of their own.

“Investors are interested in Toshiba’s chipmaking affiliate Kioxia Holdings Corp.,” possibly outbidding CVC, SBI Securities Co.’s senior analyst Yoshiharu Izumi said.

A global shortage of semiconductors due to robust demand for automobiles, smartphones and other electric devices has spotlighted chipmakers.

Toshiba owns a 40.64% stake in Kioxia, into which the Japanese firm spun off its chip business after selling a majority stake to a consortium led by U.S. private equity firm Bain Capital in 2018. Toshiba plans to list Kioxia and use a large part of the proceeds to increase shareholder returns.

Tatsuo Ushijima, a professor specializing in corporate strategy at Keio University, said going private makes sense for Toshiba to further reform its group operations.

“Toshiba would need to review its wide-ranging businesses (from nuclear power to home lighting equipment) in an environment with fewer investors holding its shares,” Ushijima said.

“Toshiba must at first outline its growth strategy regardless of whether it is going it alone or working with partners.”

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