Toshiba faces calls from investors to look for alternatives to the CVC offering

© Reuters. The Toshiba Corp. logo can be seen at the company’s factory in Kawasaki, Japan

From Makiko Yamazaki

TOKYO (Reuters) – Toshiba (OTC 🙂 Corp is facing a call from a leading shareholder to solicit other bids from potential applicants after private equity firm CVC Capital Partners made a $ 20 billion tender offer, according to a statement had given up.

US hedge fund Farallon Capital Management said the Japanese conglomerate should “sincerely evaluate the privatization proposal through a fair process that includes a proactive market review and the formation of an independent special committee,” the statement said.

Farallon, Toshiba’s third largest shareholder with a roughly 6% stake, is the first major investor to publicly comment on CVC’s unsolicited offer of 5,000 yen ($ 45.68) per share, a 30% premium over that, according to a source corresponds to the previous value.

Toshiba’s privatization would improve governance and capital allocation by “further balancing the interests of shareholders and management,” Farallon said.

Investors say a deal this size would attract other potential applicants. Two sources familiar with the matter said Toshiba has been approached by other applicants in the past.

If a change of control is likely in the United States, the goal must seek and achieve the highest price reasonable by all parties, said Nicholas Benes, corporate governance expert and representative director of the Board Director Education Institute of Japan.

The board of directors’ duty would shift to “getting the highest price for shareholders” by conducting an auction process, he said. “Japan does not have that rule of law, however. It can leave the standard for board decision-making unclear, resulting in lower value for shareholders.”

($ 1 = 109,4600 yen)

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