State-backed Japan Investment Corporation is considering a bid for Toshiba, according to Bloomberg, a move that could block a PE takeover of the Tokyo-listed conglomerate.

KKR and Blackstone are already in talks to buy Toshiba in a deal that, given the industrial giant's $19 billion market cap, would be the largest PE buyout of any Japanese company.

So far, JIC has reportedly only signed an agreement allowing it to access Toshiba's financial information, and has yet to make a formal bid. JIC, which is a public-private partnership formed by the Japanese government and 19 major corporations in the country, has a track record for competing to block would-be PE buyouts of Japanese technology groups. In 2012, JIC's subsidiary, the Innovation Network Corporation of Japan, successfully formed a consortium that prevented KKR's takeover of chipmaker Renesas.

If a PE deal for Toshiba does go ahead, it would represent a figure that's more than quadruple the total Japanese PE deal value so far this year, according to PitchBook data.
   

It's unlikely that the Japanese government will want to see Toshiba, which has operations in sensitive areas such as deep tech and nuclear power, come under foreign PE ownership. On the other hand, Toshiba has suffered a series of corporate governance failures—including an accounting scandal in 2015—and has been under pressure from its largest shareholder, Singapore's Effissimo Capital Management, to find foreign buyers.

Toshiba has been attracting attention from PE giants for some time. Apollo Global Management, Bain Capital, Brookfield and CVC Capital Partners have all expressed an interest in the company. Toshiba rebuffed CVC's advances last April, stating that it preferred to remain a public company. Effissimo reportedly said it would consider selling its roughly 10% stake in the business to Bain Capital. This came after Toshiba's plan to split the company into two divisions was met with fierce opposition from shareholders.

Bain Capital being considered the suitor of choice is not surprising, given that the PE house led a consortium that bought Toshiba's memory chip business for $18 billion in 2018. The consortium included South Korean chipmaker SK Hynix, Apple, Dell Technologies, Seagate Technology and Kingston Technology. Toshiba itself bought back 40% of the company post-sale.

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This article originally appeared on PitchBook News