Purchase Expectations Rising While Toshiba Shareholders Expected to Support Director Nominations

Toshiba Company
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The Japanese conglomerate Toshiba Corp. (6502.T) is forecast to have all of its proposed directors, which includes two hedge fund investors, approved by shareholders on Tuesday.

The approval of these outside directors could signal a turning point for the 146-year-old Japanese corporation and might expedite a potential takeover. It has nominated executives from Elliott Management and Farallon Capital Management for approval as outside directors at the corporation’s annual general meeting. It has been a long-running war with activist investors that may finally be ended by this move.

Institutional Shareholder Services Inc. (ISS) and Glass Lewis have both recommended that shareholders vote for their appointments. It has not been trouble-free, however, and critics have not been absent. A former high court judge named Mariko Watahiki has objected to Elliott and Farallon’s nominees, saying the board would be skewed in favour of activist investors if they were on the board.

Toshiba (TYO: 6502) shareholders will vote on Tuesday on whether to endorse all the firm’s proposed directors, including two hedge fund investors, as they seek to avert a potential takeover of the 146-year-old Japanese conglomerate.

The firm has suggested that Elliott Management and Farallon Capital Management become outside directors at the firm’s annual general meeting in an attempt to end a long-running battle between the corporation and activist investors. It has been proposed by Institutional Shareholder Services and Glass Lewis, two influential proxy advisers.

The shareholder representatives will join Toshiba’s strategic review committee, which will be chaired by its special committee. Attention would then turn to whether director Watahiki would retain his post on the committee if the shareholders elect him.

Eight initial buyout bids and two capital alliances that would keep the company public were received in July. Toshiba said in a statement that it had received eight initial buyout proposals in addition to two proposals to form capital alliances.

According to Reuters, the bidders are thinking about offering up to 7,000 yen ($51.84) per share to take Toshiba private, valuing the deal at as much as $22 billion, although the pricing range is wide and a lot of conditions are attached. The company’s stock has climbed 21% in the past year, giving it a market value of $18 billion.

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