U.S. hedge fund Farallon calls on Toshiba to get two-thirds of shareholders to back break-up
Reuters
Published Jan 18, 2022 06:19AM ET
Updated Jan 18, 2022 11:01AM ET
By Makiko Yamazaki
TOKYO (Reuters) -Farallon Capital Management on Tuesday urged Toshiba (OTC:TOSYY) Corp to secure the legally required support of two-thirds of its shareholders before the Japanese industrial conglomerate continues with a controversial plan to split in three.
U.S. hedge fund Farallon, Toshiba's third-largest shareholder with a stake of more than 6%, joined the second-largest investor 3D Investment Partners in demanding a higher threshold for the break-up plan.
Since Toshiba is nearly 30% owned by foreign funds, many of which appear to oppose the split, setting the 67% bar could force the conglomerate to ditch its plan.
Toshiba should seek approval from two-thirds of its shareholders "before it risks expending significant time, cost and management resources on the separation plan," Farallon said in a statement.
"The separation plan without shareholder trust would achieve nothing but the creation of three discrete companies, with each inheriting the same issues as Toshiba," it said.
Toshiba is preparing to hold an extraordinary shareholder meeting (EGM) in March to gauge shareholder support for the break-up plan, set to be completed by March 2024. But details of the meeting have been undecided, including the level of shareholder support it will require to continue with the plan.
In a statement to Reuters, the company said it would announce the EGM date and agenda when it decides on the convocation.
With its demand, Farallon is effectively forcing Toshiba to bring forward by more than a year a legally mandated vote requiring backing from two-thirds of shareholders. Officially, the vote is not slated to be held until the annual shareholders' meeting in 2023.
The break-up plan was announced last November after a five-month strategic review following years of accounting scandals and governance issues that undermined investor confidence and saw Toshiba's market value more than halve, to around $18 billion, from an early 2000s peak.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.