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TOKYO — Singapore-based 3D Investment Partners announced on Monday that it has sent an open letter to Toshiba’s board requesting an objective review of the company’s strategic choices, including its shareholder structure, following a buyout offer from private equity firm CVC Capital Partners.
In response to CVC’s proposal to take Toshiba private, the company said in a statement last week that “We currently believe that being a publicly traded company provides a stable equity structure suitable for enhancing long-term value creation.”
“By taking advantage of the listed status it will lead to corporate value enhancement,” Toshiba added.
3D Investment Partners, which owns about a 7% stake in the Japanese conglomerate, argues in the letter that Toshiba has lost the trust of investors by announcing that the company will remain listed on the Tokyo stock market.
The investment company states that Toshiba must appoint an independent financial advisor in a bid to conduct “a formal review of strategic alternatives.”
“Toshiba should explicitly indicate that it is open to alternative ownership structures and correct media speculation that Toshiba’s management team and board have a strong preference for remaining a listed company,” the letter said.
3D Investment Partners believes the fair value of Toshiba’s stock is over 6,500 yen per share as opposed to the current price of about 4,400 yen. In March, Toshiba held an extraordinary shareholders meeting in which the company faced activist shareholder Effissimo Capital Management. A proposal by the Singapore-based fund, which called for an investigation into whether management exerted influence on shareholders during last year’s shareholders meeting, was approved after a majority of Toshiba’s shareholders voted in favor.
Confusion reigns over the conglomerate’s future as it continues to be confronted by activist investors, while on April 14 Nobuaki Kurumatani stepped down as CEO of Toshiba amid declining trust in his leadership.
