Toshiba shareholders voted to reject management’s plan to split the industrial conglomerate in two, leaving a new set of setbacks for a company that has struggled with investors for four years. .
A key vote on Thursday revealed a stark divide among shareholders and dimmed the prospect of a swift turnaround for one of Japan’s most prominent industrial names. The vote triggered a massive sell-off in Toshiba shares, which fell as much as 5%.
The vote ended an extraordinary general assembly held in the hope of ending a turbulent times that forced the resignation of two executives and increase the likelihood that the company will done privately in what should have been Japan’s largest-ever purchase.
A plan proposed last year by UBS bankers to split the company into three was vehemently opposed by shareholders and later abandoned, with a two-way split later seen as the solution. Best and most cost effective alternative.
But in another twist of the story, shareholders also used EGM to vote down a proposal from Toshiba’s second-largest shareholder – Singapore’s 3D Investment Partners fund – that would force the company to reopen negotiations with private equity firms and other investors. A separate take-out arrangement is possible.
Some of Toshiba’s biggest investors, including Singapore’s Effissimo, US fund Farallon Capital and various smaller hedge funds, have been agitating for a private deal. They argued that at an earlier strategic review, the company had not properly explored that possibility.
The rejection of the proposal by both Toshiba and 3D seems to create an impasse, but some shareholders think the outcome could be positive. According to investors, the absence of a clear mandate on action from shareholders could allow Taro Shimada, the newly appointed chief executive officer earlier this month, to freely impose potentially radical ideas. their own to change.
Shimada did not express her opinion on the proposals in the EGM, saying it was “not appropriate to express my personal thoughts today”. Investors have told the Financial Times that he has privately expressed his support for the option to sell privately, which could remain a possibility even if the official vote is beaten. lose.
When announcing the results of the vote, Shimada only said the company would “consider various options to enhance the value of our business”.
As the Tokyo market reopened for afternoon trading, Toshiba stock erased its morning gain and became the worst performer on the exchange, at one point down 5% from its all-time high. day and hit ¥ 4,542.
Satoshi Tsunakawa, Toshiba’s former chief executive officer and now chairman of the board, opposed the acquisition and said it could lead to the company losing public orders and warned Toshiba to force must sell sensitive segments in the defense and nuclear divisions. .
At Thursday’s meeting, he told investors that privatization would mean foreign funds would buy up the company. “We made the proposal because we wanted to do the split ourselves,” he said.
