3D Investment Partners, a significant stakeholder in Toshiba Corp, is pressing the technology firm to conduct a thorough re-evaluation of the selling strategy in order to welcome more prospective buyers after CVC Capital Partners postponed their proposal pending approval by the board.
With a substantial 7.2% ownership in Toshiba, 3D Investment has advocated for this strategic reassessment following a proposed acquisition from CVC Capital Partners valued at $21 billion earlier in the month, sparking anticipation of other potential acquirers.
The aspiration of CVC to acquire Toshiba at $46 per share triggered other private equity entities, including KKR—who demonstrated readiness to surpass CVC’s bid—alongside Bain Capital, and Brookfield Asset Management from Canada.
Toshiba, for its part, pointed to an absence of comprehensive details in CVC’s offer as the rationale for non-consideration. CVC has yet to rescind its proposal officially. Highlighting the contingent nature of their offer, CVC emphasized its dependence on the full endorsement of both Toshiba’s board and its executive team. CVC expressed its intention to step back respectfully until it receives direction about whether the privatization aligns with Toshiba’s strategic goals.
In a recent message to the board, 3D was explicit in its desire for other investors to come forward with bids. It urges the board to openly invite offers that could amplify the company’s value and to conduct an official exploration of other strategic options.
“Ensuring an equitable and transparent process, Toshiba should clearly declare openness to different ownership models and rectify media conjectures stating a board and management preference to remain public,” 3D highlighted.
Despite its inclination to remain in the public market—citing the benefits for “long-term value creation”—Toshiba conveyed that it would consider various proposals, including potential privatization.
Market analyst Travis Lundy of Quiddity Advisors, contributing to Smartkarma, commented to Reuters that the publication of such a letter puts pressure on Toshiba’s board.
“Expectations are for more stakeholders to issue similar statements.”
The U.S.-based Farallon Capital Management, owning a 6% stake in Toshiba, similarly urged the corporation to solicit additional offers from interested parties.
While Toshiba’s top investor Effissimo Capital Management, which has around a 10% stake, has kept silent regarding the CVC bid, they have previously questioned the board’s operations and played a role in the resignation of Toshiba’s former CEO Nobuaki Kurumatani. Intriguingly, the opportunity from CVC surfaced as a result of Kurumatani’s initiatives.
In their letter, the Singapore-headquartered 3D declared their willingness to act should the board fail to respond to their call to action. They stated the necessity for shareholders to assume “a more significant and continuous role in governance” should their demands be ignored.
An anonymous investor in Toshiba, as reported by Reuters, stressed that shareholders would hold the management to account should there be attempts to hinder acquisition pursuits.
3D Investment, appraising the value of Toshiba shares at ¥6,500, calls for a robust reassessment to determine the firm’s accurate market valuation. Toshiba’s stock has been volatile post-CVC’s offer, experiencing a peak of ¥4,895 on April 15, followed by a dip to ¥4,410 at the close of the trading week.
