The company announced on Wednesday that Toshiba President Nobuaki Kurumatani had resigned. According to reports, a private equity fund’s takeover offer has stirred up turmoil within the Japanese company.
At the time of his resignation, there were reports that two other funds were considering acquiring Japanese household names under their own names, which could trigger a bidding war.
Toshiba said in a statement that the board of directors has accepted Kurutani’s resignation, but did not disclose the details of why he requested the resignation. The company said he will be succeeded by Chairman Tatoshi Tsunakawa.
The move came when the board members questioned the takeover offer of CVC Capital Partners, which was where Kurumatani had previously led the Japanese business.
According to reports, the private equity firm offered more than 20 billion U.S. dollars (approximately 150.41 billion rupees) in transactions, despite reports that some people in Toshiba believed the deal was too small.
The British “Financial Times” said on Wednesday that another private equity fund KKR plans to make its own larger acquisition proposal.
Bloomberg News reported that a third Canadian Brookfield Asset Management company (Canadian Brookfield Asset Management) is also exploring possible offers.
Toshiba confirmed last week that it had received an offer from CVC Capital Partners to privatize Toshiba.
Delisting the company may allow Toshiba’s management to make faster decisions, and Toshiba’s management has recently clashed with shareholders.
It also allows Toshiba to focus its resources on renewable energy and other core businesses.
CVC has close ties with Toshiba.
Kurumatani worked for the fund from 2017 to 2018, and a senior executive of CVC Japan currently serves as an outside director of Toshiba’s board of directors.
According to reports, this intimacy has caused concerns. Justin Tang, head of Asia Research at United First Partners, said that Kurutani’s departure would “eliminate the uncertainty of potential conflicts of interest.”
He told AFP that this would also “force the board to seek other offers in the best interests of shareholders.”
“This is a very tricky situation at the moment.”
The internal turmoil in Toshiba has caused a new blow to the company. After the accounting scandal in 2015 and the bankruptcy of the US nuclear subsidiary in 2017, Toshiba has been trying to improve its governance.
After a comprehensive restructuring, its earnings rebounded and returned to the first part of the famous Tokyo Stock Exchange in January.
Any tender offer may face major challenges, including obtaining financing and regulatory approvals.
Last week, Toshiba warned that the financial assistance that CVC is expected to seek may involve “a lot of time and considerable complexity.”
Soon after the opening in Tokyo, Toshiba shares rose 4.46% to 4,800 yen (approximately Rs 3,300).
According to reports, CVC’s offer is about 5,000 yen (approximately Rs 3,400) per share, but Tang said that he believes that “for shareholders to cross this rank, there must be more than 6,000 yen (approximately Rs. 3,400). 4,100 rupees)”
Why did LG give up its smartphone business? We discussed it on the gadget 360 podcast Orbital. Later (from 22:00), we will discuss the new cooperative RPG shooting game “Outriders”. Orbital is available for Apple Podcast, Google Podcast, Spotify and wherever you get podcasts.