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Japan’s Toshiba Mulls Going After Proposal Public

 |  June 2, 2022

Toshiba, the Japanese conglomerate exploring strategic options, said it has received eight initial proposals to take it private as well as two proposals for capital alliances that would see it remain listed.

The news comes amid recent signs that Toshiba, which has long been at loggerheads with its large activist shareholder base, is growing more receptive to calls from foreign hedge fund investors to consider going private.

Last month the company, known for consumer electronics and a household name both in Japan and abroad, nominated Akihiro Watanabe, an executive from boutique US investment bank Houlihan Lokey, as chairman of its board. Two representatives were also selected to represent activist shareholders, who will act as outside directors.

“We are encouraged by the multiple proposals as we feel they reflect big expectations about Toshiba’s potential,” Chief Executive Taro Shimada told a briefing on Thursday where he also unveiled bullish new earnings targets as part of an updated business strategy.

Bedevilled by accounting and governance crises since 2015, including a scheme to sell its medical system subsidiary to Canon for around US$6.1 billion in 2016 while evading notification rules, Toshiba set up a special committee in April to solicit proposals after shareholders voted down a management-backed restructuring plan. The deadline for non-binding proposals was Monday.

The company said that it will evaluate financing arrangements and the feasibility of the proposals and then after its annual shareholders’ meeting on June 28, it will select potential investors to be given due diligence opportunities.

Toshiba represents “a big potential deal” and its activist shareholders “are clearly highly motivated so it is worth a look for any large PE funds,” said LightStream Research analyst Mio Kato, who publishes on Smartkarma.

“It hasn’t even gotten to due diligence yet so there isn’t much reason to not give it a look.”

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