Toshiba Corp chief executive officer Nobuaki Kurumatani resigned yesterday as a buyout offer from a private equity fund stirs turmoil inside the storied Japanese company, with reports suggesting that two other funds are considering bids.
Kurumatani’s resignation is the latest development in years of upheaval at the firm, which in January won back its spot on the first section of the Tokyo Stock Exchange after restructuring.
The board accepted Kurumatani’s resignation “as he has completed his mission of revitalizing Toshiba,” Osamu Nagayama, head of the firm’s appointment committee, told reporters after the company confirmed the departure.
Photo: AFP
Kurumatani declined to appear before journalists, but a statement from him was read out at the event.
His departure comes as board members raise questions about the buyout offer from CVC Capital Partners Ltd, where Kurumatani formerly headed Japanese operations — although Nagayama has said that conflict of interest allegations had “nothing to do” with the resignation.
The private equity firm is reportedly offering a deal in excess of US$20 billion, but there are reports that some at Toshiba see that sum as too small.
Kuramtani’s departure is likely to be seen as a reflection of internal disagreements over the CVC offer.
The Financial Times reported that another private equity fund, KKR & Co Inc, is planning to offer its own larger buyout proposal.
Bloomberg News reported that a third fund, Canadian Brookfield Asset Management Inc, is also exploring a possible offer.
Toshiba officials did not address the reports at yesterday’s news conference.
Toshiba last week confirmed that it had received the CVC offer, which would take Toshiba private.
Delisting the firm could produce faster decisionmaking by Toshiba’s management, which has over the past few months clashed with shareholders.
It could also allow Toshiba to concentrate resources on renewable energies and other core businesses.
However, any buyout offer is likely to face significant challenges, including securing financing and regulatory approval.
Nagayama said that Toshiba would consider CVC’s offer cautiously, but warned that it “lacks detail as an initial proposal.”
“It’s not something Toshiba has asked for, and it has come suddenly,” he said.
“We will make the best choice for shareholders, our employees, and society” if a formal proposal is made, Kurumatani’s successor, Satoshi Tsunakawa, said.
Kurumatani worked for CVC from 2017 to 2018, and his departure would “remove uncertainty over potential conflicts of interest”, said Justin Tang (鄧文雄), head of Asian research at United First Partners.
It will also “force the board to seek other offers that are in the best interests of shareholders,” he said. “It is a very sticky situation at present.”
CVC reportedly hopes to secure financing assistance for its buyout bid, and Toshiba last week said that the bid was likely to involve “a substantial amount of time and considerable complexity.”
The CVC offer is reportedly about ￥5,000 per share, but Tang said that he believes “a price north of ￥6,000 is necessary to get shareholders over the line.”
Toshiba shares yesterday closed up 5.76 percent at ￥4,860.
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