In a board reorganization, Toshiba of Japan hires an M & A advisor and activist investors.
Tokyo (Reuters) – Toshiba (OTC: TOSYY) Corp nominated an executive from M&A advisory firm Houlihan Lokey (NYSE: HLI) as chairperson and activist shareholders as outside directors on Thursday, raising the prospect of the conglomerate going private.
Toshiba chose Akihiro Watanabe before its annual shareholders’ meeting on June 28. Watanabe is the founder of the Japanese M&A consulting firm GCA Corp, which was recently bought by the U.S. investment bank Houlihan Lokey.
It was also recommended that Nabeel Bhanji, portfolio manager at Elliott Management, and Eijiro Imai, managing director at Farallon Capital Management, be awarded board seats, a potential turning point in the protracted conflict between Toshiba and its activist shareholders.
Farallon, Toshiba’s third-largest shareholder with a holding of over 6 percent, feels that taking the company private would maximize shareholder value. Elliott owns slightly less than 5% of Toshiba, according to sources.
Since shareholders rejected a management-backed restructuring proposal in 2015, Toshiba has been investigating strategic options, including potential mergers to go private. Toshiba has been plagued by accounting and governance crises since 2015.
Raymond Zage, who was in charge of the nomination committee, said in a briefing that the committee thought it would be “beneficial to all shareholders” if two of the thirteen board members came from big shareholders because of how important the talks about future privatization ideas were.
Satoshi Tsunakawa, who has been serving as interim board chair since the last chairperson’s re-election was defeated last year, will step down and become an executive advisor.
The nominations of board directors were delayed by approximately two weeks as Toshiba took additional time to determine if certain applicants had potential conflicts of interest.
In addition, Toshiba proposed Taro Shimada and Goro Yanase for the positions of chief executive officer and chief operating officer, respectively. Since Tsunakawa’s unexpected retirement as CEO in March, the two have also been acting in the posts on an interim basis.
