Toshiba CEO Resigns, Stock Receives Boost on Bidding War Expectations
Toshiba CEO - Nobuaki Kurumatani, has resigned Wednesday amid the newly-found controversy over a $20 billion take-private bid from CVC Capital Partners. The stock has received a boost on news that KKR & Co and Brookfield are planning on coming up with offers of their own to take over the tech giant.
CVC's offer to take the Toshiba private and retain incumbent management was perceived as thought it’s been designed to shield Kurumatani and other managers from pressure from activist shareholders, who have successfully pushed for an independent probe into the allegations.
As a result, Kurumatani was forced to step aside, giving his seat to Satoshi Tsunakawa, who led the company prior.
"Tsunakawa has the trust of various stakeholders”, Toshiba Board Chairman - Osamu Nagayama told a news conference.
Nagayama also mentioned that CVC's April 6 proposal was unsolicited, lacked substance and required cautious consideration, meaning Toshiba will consider setting up an independent committee of external directors after receiving a formal proposal from CVC.
Toshiba shares were trading 5% higher at 4,825 yen in Wednesday afternoon trade, not too far off the 5,000 yen per share level that a source has said was proposed by CVC. Private equity giant KKR & Co is also considering a buyout offer that would exceed CVC's, the Financial Times has reported. Canada's Brookfield Asset Management Inc is, too, in the preliminarily stages of exploring an offer, according to Bloomberg News.
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