Image: Reuters Berita 24 English - On Tuesday, Toshiba Corp 's shareholders are likely to vote for all of the proposed directors, includ...
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| Image: Reuters |
Berita 24 English - On Tuesday, Toshiba Corp's shareholders are likely to vote for all of the proposed directors, including two from its hedge fund investors. This could be a turning point for the 146-year-old Japanese conglomerate and speed up a possible buyout.
At its annual general meeting, the company wants Elliott Management and Farallon Capital Management executives to be approved as outside directors. This is meant to end a long-running fight between the company and activist investors.
Institutional Shareholder Services Inc (ISS) and Glass Lewis, two important proxy advisers, have both said that shareholders should vote for their appointments.
But there have been problems with the plan and people who don't like it. Former high court judge and external director Mariko Watahiki disagrees with the candidates put forward by Elliott and Farallon. She says that having Elliott and Farallon on the board would tilt it toward activist investors.
Reuters talked to a number of domestic asset managers who own Toshiba stock and asked them if they agreed with Watahiki. "The scope of those shareholders (Elliott and Farallon) is probably much narrower than ours," said one, referring to the funds' preference for supporting a buyout over a longer-term strategic approach.
But Watahiki's objection isn't likely to get enough support to get the nominations thrown out, said a person who knows about the situation and spoke on the condition of anonymity because the matter was private.
Hedge fund shareholders say the board nominations are one sign that Toshiba has become more open to the idea of being taken private. Toshiba has been looking into strategic options since shareholders rejected a plan to restructure the company.
Toshiba has said that the shareholder representatives will likely join the board's special committee in charge of a strategic review that is still going on. If they get elected, everyone would be interested in whether or not director Watahiki, who is on the committee, would keep his position.
This month, Toshiba said that it had received eight initial buyout offers and two offers for capital alliances that would let it stay on the stock market.
According to Reuters, the bidders are thinking about offering up to 7,000 yen ($51.84) per share to take the company private. This would put the deal's value at up to $22 billion, but the price range is wide and there are many conditions.
Toshiba's stock price ended the day on Monday at 5,707 yen, giving the company a market value of $18 billion. This is a 21 percent increase from the beginning of the year.
($1 = 135.0400 yen)
