Toshiba Director Backs Resolution That Could Open Door to Buyout

Raymond Zage breaks with the party line, backing a resolution that would request that the company solicit offers from private equity.

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Toshiba Corp. director has publicly said he backs a shareholder resolution that could lead to a buyout of the Japanese conglomerate, breaking from Toshiba’s party line.

Raymond Zage said in a statement dated Wednesday, March 16, he would vote for a resolution at the March 24 extraordinary meeting requesting that the company solicit buyout offers from private equity firms despite the board’s recommendation to vote against the resolution.

“The shareholder resolution was worded in such a way which resulted in a Toshiba board recommendation to vote AGAINST the resolution; but at its fundamental core, this proposal was very simple in nature—to solicit additional information from the same private equity investors with whom the [strategic review committee] and management spoke to on multiple occasions in 2021 as part of the SRC process—specifically focused on price indications for potential bids, and to provide this information to shareholders to consider as an alternative to the spin off plan,” Zage said in a statement posted to Twitter on Thursday, March 17.

Zage has been an independent director on Toshiba’s board since June 2019 and since 2021 has served on the strategic review committee.

Zage, who is one of six independent directors, according to BoardEx data, said he believes he is one of the top 100 shareholders of Toshiba and own more shares than the rest of the board and senior management of the company combined.

Zage said he was providing the statement to shareholders ahead of the EGM in the spirit of transparency.

“I don’t agree with all aspects of resolution three but I do feel, after further consideration and feedback from shareholders, that, given the extensive historical interaction with private equity funds, it should not be difficult, nor time consuming, to obtain preliminary bid indications and that some level of additional information could be provided to shareholders for the purposes of comparing a potential privatization with the potential value of the proposed spin off plan,” he wrote.

Toshiba, which is embroiled in a multiyear conflict with activist investors, is set to vote March 24 on a planned spinoff of its devices business. Glass, Lewis & Co. LLC and Institutional Shareholder Services Inc. have urged shareholders to vote against the resolution. Effissimo Capital Management Pte. Ltd., a 10.4% investor, has also said it would vote against the resolution.

Toshiba in April 2021 dismissed a ¥2.3 trillion ($19.4 billion) proposal from CVC Capital Partners Group as so lacking in detail it had not been possible to evaluate. Bain Capital LLC was also said to be interested at the time.

This article originally was posted on The Deal on March 17, 2022 by Ron Orol. View the original article here.

Follow Ronald Orol on Twitter and LinkedIn.

About the author

Ronald Orol
Senior Editor at | + posts

Ronald Orol leads coverage of activist hedge fund managers, a high-profile group of corporate investors who press for blockbuster deals and were the subject of his book “Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World.” Ron produces the Activist Daily and Activist Weekly briefings, which offer exclusives, trend pieces and breaking analysis about insurgent investors and their M&A efforts. Ron also authored “Corporate Governance in the Era of Activism,” a digital handbook for CNBC’s Jim Cramer. He previously worked as a financial regulation and activism reporter at MarketWatch and Dow Jones Newswires.

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