NEW YORK / TOKYO, Sept. 30 (Reuters) – Hedge fund Elliott Management says it has a “significant” stake in struggling Japanese industrial conglomerate Toshiba Corp (6502.T), which is conducting strategic review under pressure from others investors who might include a sale of the business.
Elliott, one of the world’s most powerful activist investors, who oversees some $ 48 billion in assets, has invested in Toshiba since 2017 but recently increased its stake to just under 5%, making it one of the top 10 investors, people familiar with the company’s investments. noted.
The announcement of the New York-based company comes just months after Effissimo Capital Management, Farallon Capital Management and other shareholders ousted the Toshiba chairman after the company colluded with the Japanese government to lobby on foreign investors.
âOur investment in Toshiba reflects our strong belief in the underlying value of the company,â said Elliott, who prefers to conduct his negotiations out of the spotlight, in the statement.
The company is expected to brief investors on its plans in the coming weeks and is expected to release its results in November. As those deadlines approach, Toshiba told shareholders it was considering three possible ways to try to unlock value, the sources said.
Elliott has engaged with management and the board of directors and said in a statement that the company has been “encouraged by the constructive nature of our engagement with the company over the past several months.”
A spokesperson for Toshiba said the company was not disclosing any communication with its shareholders.
During his discussions, the sources said Elliott suggested to Toshiba that the company’s stock could be worth 6,000 yen, which would be a 27% increase from Thursday’s close of 4,715 yen.
The three possible approaches for Toshiba could include an outright sale to a private equity firm, a dissolution of the company led by its management team, or a combination of the two options, the sources said.
Current shareholders’ frustration with the company could make a management buyout very unlikely, suggesting instead that a private equity firm will play a role either as an outright buyer or as an investor. ‘significant minority investor, the sources said.
Toshiba has launched a full review of its current assets after rejecting a $ 20 billion takeover bid from CVC Capital Partners in April. The results of the review will be presented when the company announces a new medium-term business plan in October. Read more .
Since then, Toshiba has been in talks with financial and strategic investors, including US private equity firm KKR & Co Inc (KKR.N), to seek their ideas for a new strategy. Read more
Japan has recently become a popular hunting ground for activist American investors, with Third Point targeting Sony Group (6758.T) and Olympus (7733.T) appointing three foreign directors after ValueAct took a stake in the company.
ValueAct has also invested in Nintendo (7974.T) and Seven & i Holdings (3382.T).
Elliott also made a commitment to Japan when he acquired an almost $ 3 billion stake in SoftBank in early 2020. Although he reduced the stake as the share price rose, the fund speculative remains invested in SoftBank.
In the first half of 2021, 10 campaigns were launched in Japanese companies, according to data from investment bank Lazard.
Reporting by Svea Herbst-Bayliss in New York, Makiko Yamazaki in Tokyo and Tiyashi Datta in Bengaluru; Editing by Kirsten Donovan, Jonathan Oatis and David Evans
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