TOKYO () – On Thursday, Japan’s second-largest investor in Toshiba Corporation called for an extraordinary general meeting and forced the company to support two-thirds of its support for a tripartite split plan that has angered some major foreign shareholders.
The Singapore-based 3D Investment Partners hedge fund’s offer is the culmination of a long and fierce struggle between a once-powerful technology conglomerate and a number of its foreign shareholders, many of whom are activists.
Currently, about 30 percent of Toshiba is owned by foreign hedge funds, many of which the management plans to split the company into three businesses – each for energy / infrastructure, electronic devices and flash memory chips – to maximize shareholder value. doubts that it is possible.
The divorce plan, announced in November last year, has eroded investor confidence after years of accounting disputes and management problems, and Toshiba’s market capitalization has more than doubled since its peak in the early 2000s. ‘to the program, down about $ 18 billion.
If 3D’s proposal for a meeting is accepted, it will lead to a voting process that could result in the cancellation of the divorce plan, a strategy that reflects a similar move announced by General Electric Co. last year. -sound.
3D owns more than 7% of Toshiba, with a share value of more than $ 1 billion. In a statement, he expressed concern about the cost of continuing the split before receiving a mandate from shareholders and called on Toshiba to continue its strategic review.
“There is no rationale for Toshiba to implement a high-cost allocation plan without knowing whether a sufficient number of shareholders will eventually agree,” the fund said. Toshiba had previously said it would require 10 billion yen ($ 86 million) to implement the plan.
Toshiba said on Thursday that it had received the offer from 3D and was currently reviewing it. Toshiba shares were almost flat on Thursday morning compared to a 2.1% decline in the Tokyo market.
‘DISPOSAL OF ALTERNATIVES’
For its part, 3D, if the extraordinary general meeting approves, it will consider its intention to amend Toshiba’s founding charter to support two-thirds of the vote for a “strategic restructuring plan”. said he would vote against the proposal. .
Instead, 3D insists that the company should not approve any reorganization “without first thoroughly exploring other alternatives.”
With its proposals, 3D is effectively trying to push the conglomerate forward more than a year in a vote that requires the support of two-thirds of its shareholders under Japanese law. Formally, voting is not scheduled to take place until the 2023 annual general meeting of shareholders.
Weakened by the 2015 accounting scandal and the bankruptcy of the U.S. nuclear business, Toshiba has proposed a split to bolster its focus on private business.
But 3D and other shareholders have called for a deeper review that takes into account potential private equity offers.
Toshiba’s strategic review has so far “failed to consider the full range of alternatives,” 3D said.
The company itself has proposed an extraordinary shareholders ’meeting in January-March to measure shareholder support for the breakdown plan, which is due to be completed by March 2024.
But the details of the meeting are unknown, including the level of shareholder support to continue the plan.
One of the alternatives to direct voting in support of the divorce plan discussed among Toshiba’s board of directors was a vote at a special meeting of shareholders to reappoint the board of directors to replace it. is to ask to give, say people familiar with the matter.
Interview by Makiko Yamazaki; Edited by David Dolan and Kenneth Maxwell