Toshiba forced to seek alternative to $20bn takeover bid

Photo: AP

The pressure on Japanese electronics conglomerate Toshiba is increasing as major shareholders urged the management to seek new options for potential buyers to compete to the $20bn buyout offer from CVC Capital partners, Reuters reported. The intentions of CVC were to take off Toshiba from the stock exchange and transform it in a private company in a move to improve corporate governance and improve market performance.

US hedge fund Farallon Capital Management said in a statement the Japanese conglomerate should evaluate “the privatisation proposal in a sincere manner through a fair process that includes a proactive market check and formation of an independent special committee.”

Farallon, Toshiba’s third-largest shareholder with a stake of around 6% according to a Reuters source is the first large investor to publicly comment on CVC’s unsolicited offer of $45.68 per share, a 30% premium on its earlier value.

Taking Toshiba private would improve its governance and capital allocation by “further aligning the interests of shareholders and management,” Farallon said. Investors say a deal of this size would lure other potential suitors. When a change-of-control is likely to occur, the target is usually required to seek and achieve the highest price reasonably available from any and all parties. However, Japan does not have this legal principle as a compulsory requirement. This can leave the standard for board decisions unclear, leading to less value for shareholders.

Similar articles

  • Covid-19 vaccine makers slump on expected patent waiver

    Covid-19 vaccine makers slump on expected patent waiver

    The stocks of all companies involved in production of Covid-19 vaccines fell, as US and EU backed the call from the World Health Organisation to waive patent rights claims over the jabs production, Reuters reported. The share slumps came even as some analysts raised doubts about any near-term pressure on Covid-19 vaccine sales from discussions of waiving intellectual property rights, given the manufacturing complexity and scarcity of raw materials. Combined, Pfizer and Moderna have forecast a total of over $45 billion in sales this year for their Covid-19 vaccines.

  • Tesla misses key technology target

    Tesla misses key technology target

    The producer of electric cars Tesla admitted it would miss a target set by its majority owner Elon Musk - to develop full self-driving vehicles by the end of 2021, Reuters reported. The announcement seriously undermines Tesla ambitions to influence the global EV market. Documents released in media earlier this week showed that the company is falling behind announced deadlines while incidents with EVs continue to rise.

  • Bayer loses court fight over EU pesticides

    Bayer loses court fight over EU pesticides

    The German chemical conglomerate Bayer lost an appeal in EU court against a ban related to the usage of pesticides amid growing concerns linked to the extinction on bees, Reuters reported. The European Union's top court upheld the EU's partial ban on insecticides linked to harming bees, preventing their use on certain crops. Bayer appealed to overturn a lower EU court's 2018 decision to uphold the EU ban.