Toshiba Corp

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Japan's Toshiba considers $20 billion take-private deal - source

By Makiko Yamazaki
APRIL 7, 202112:39 AM

TOKYO (Reuters) -Toshiba Corp is considering a $20 billion offer from private equity firm CVC Capital Partners to take it private, a person familiar with the matter said, as the Japanese industrial conglomerate faces pressure from activist shareholders to improve governance.

The proposed deal, which comes three weeks after shareholders approved an independent probe into the scandal-hit company, could shield management, particularly Chief Executive Nobuaki Kurumatani, from that scrutiny. It would, however, invite regulatory review given its government work.

“Toshiba received an initial proposal yesterday, and will ask for further clarification and give it careful consideration,” Toshiba said in a statement, without providing further details.

Toshiba’s board, which includes Kurumatani who joined Toshiba from CVC, and Yoshiaki Fujimori, a senior adviser at the private equity firm, discussed the proposal on Wednesday, the source with knowledge of the proposal said.

Shares in Toshiba soared 18% to their daily-limit on Wednesday.

CVC is considering a 30% premium over Toshiba’s current share price in a tender offer, putting the value of the deal at nearly 2.3 trillion yen ($21 billion) based on Tuesday’s closing share price of 3,830 yen, said the source, who declined to be identified as the matter is private.

LightStream Research analyst Mio Kato, who publishes on investment research platform Smartkarma, described that offer price as too low.

“We believe that current shareholders, especially activists, will want a rather steep price,” he said in research note.

If they accepted the current offer it would still be the biggest private equity-led deal in Asia Pacific this year, surpassing Blackstone’s $6 billion offer for Crown Resorts Ltd in Australia, according to Refinitiv data. It would also be CVC’s biggest foray into the region so far.

For CVC, which declined to comment, the proposal represents another chance to expand in Japan where large companies are under pressure to sell non-core assets and improve returns to shareholders. Other deals by the private equity firm include the $1.5 billion purchase of Shiseido Co’s lower-priced skincare and shampoo brands.

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Toshiba board gains two directors from activist funds in historic shift

By Makiko Yamazaki
June 28, 2022 2:49 PM GMT+7

TOKYO, June 28 (Reuters) - Toshiba Corp (6502.T) shareholders voted in two board directors from activist hedge fund investors at its annual general meeting on Tuesday - an inclusion that is expected to add momentum to its exploration of potential buyout deals.

Nabeel Bhanji, a senior portfolio manager at Elliott Management, and Eijiro Imai, managing director at Farallon Capital Management were elected, as was Akihiro Watanabe, an executive from boutique U.S. investment bank Houlihan Lokey, who becomes chairman of its board.

The appointment of Bhanji and Imai was not without controversy and right after the vote, external director Mariko Watahiki tendered her resignation, TV Tokyo reported. Toshiba declined immediate comment.

Watahiki, a former high court judge, had argued their appointments could lead to the board becoming too skewed towards the input of activist investors.

To date only a few large Japanese companies have brought activist shareholders onto their boards. The inclusion by Toshiba is particularly significant given its history of accounting and governance crises since 2015 and tensions with its large activist investor base.

"One of the major issues that we've had as a company is a lack of trust between our large shareholders and management, and this was an attempt to address that," Raymond Zage, who chairs the nomination committee, told the meeting before the vote.

Farallon and Elliott together hold about 10% of Toshiba and activist shareholders are estimated to own roughly a quarter of the company's stock.

Tensions with activist investors were particularly fraught last year when a shareholder-commissioned investigation concluded the company had colluded with Japan's trade ministry - which sees Toshiba's nuclear and defence technology as a strategic asset - to block overseas investors from gaining influence at its 2020 shareholder meeting.

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