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Toshiba Investors Fret Over Lack of Clarity on Breakup

Japanese conglomerate has proposed an extraordinary general meeting in the January-March quarter to gauge shareholder support

The Japanese industrial group Toshiba's headquarters in Tokyo. Photo: AFP


Toshiba is grappling with difficult decisions as it seeks to muster shareholder support for its plan to split into three companies, with some investors concerned it might set a preliminary bar for approval lower than they would like.

The scandal-ridden Japanese conglomerate outlined the breakup plan last month – a scheme that runs counter to calls by some investors for Toshiba to be taken private and one which sources have said was partly designed to encourage activist shareholders to sell their stakes.

3D Investment Partners, which owns more than 7% of Toshiba, last month publicly said it opposes the plan and called on the conglomerate to solicit offers from potential buyers. At least several other large shareholders are also opposed.

Toshiba has proposed an extraordinary general meeting (EGM) in the January-March quarter to gauge shareholder support. If it wins support, the company would then proceed with preparations for the breakup which it wants to complete by March 2024.

A formal shareholder vote would take place much closer to the timing of the breakup and would by law require two-thirds in favour for it to be approved.


Shareholder Approval

Much about the EGM, however, is unclear – including how Toshiba will word any motions and exactly when it will take place.

The EGM would also not be binding under Japanese law, meaning Toshiba is allowed to set the level required for shareholder approval.

A Toshiba spokesperson said details of the EGM have yet to be decided including the level of approval. Some shareholders said they would be upset if Toshiba decides it only needs to win a simple majority of votes.

Jefferies analysts said the split was a “move in the right direction”, but criticised the pace of restructuring.

“If only this were to happen within the next 3-6 months, it will make us extremely bullish, as that would imply tangible progress in Toshiba’s privatisation,” Atul Goyal, an equity analyst in Singapore, said.


  • Reuters with additional editing by George Russell





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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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