Toshiba shares rise after opening door to takeover

The Toshiba Corp logo is seen at the company premises in Kawasaki, Japan June 10, 2021. REUTERS/Kim Kyung-Hoon

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TOKYO, April 22 (Reuters) – Shares of Toshiba Corp jumped nearly 5% in Tokyo trading on Friday after the troubled Japanese conglomerate said it would seek possible offers to takeover, bolstering hopes of a lucrative exit for its hedge fund investors.

Toshiba, which has been locked in a years-long battle with some of its major shareholders over its management, said Thursday it had hired Nomura Securities (8604.T) as a financial adviser on strategic alternatives, including a potential deal to take it private.

The timing of the announcement – just ahead of an annual general meeting scheduled for June – likely speaks to the continued pressure the company has faced from investors, who have called on the company to consider a takeover.

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Shares of Toshiba ended up 4.7% at 5,400 yen, after hitting their highest level since May 2013.

Toshiba said it was committed to obtaining “workable proposals” on privatization or other alternatives, and to providing transparent updates on the process to shareholders.

Its biggest shareholder, Effissimo Capital Management, said last month it had agreed to sell its stake to Bain Capital if the US private equity firm launched a takeover bid, a move seen as potentially putting pressure on Toshiba. to restart takeover talks.

Bain said nothing has been decided on a takeover bid. The Nikkei business daily reported that the company plans to partner with Japanese investment funds to make a bid.

The involvement of local funds is seen as essential, given that some of Toshiba’s assets – including defense equipment and nuclear power – are considered strategically important in Japan.

It’s unclear whether a takeover would result in a change of direction or derail new CEO Taro Shimada’s plan to boost subscription revenue by tying software to hardware.

Last month, shareholders rejected a management proposal to spin off Toshiba’s devices unit. Read more

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Reporting by David Dolan; Editing by Christopher Cushing and Edwina Gibbs

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