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Toshiba president resigns following CVC approach

April 15, 2021

Toshiba’s president and CEO Kurumatani Nobuaki has resigned and the board has immediately appointed Tsunakawa Satoshi to succeed him.

A formal $20 billion buy-out offer from the Luxembourg and UK private equity business CVC Capital Partners made on April 6th remains on the table. Toshiba’s chairman Osamu Nagayama said CVC’s bid was unsolicited and lacking in substance, and required cautious consideration.

A week ago it seemed that Nobuaki could do no wrong, with Nagayama saying that he had helped lead Toshiba’s recovery. Indeed, Toshiba shares were up more than 6 per cent in Asian morning trading following the bid and media reports of potential rival bids for the company from other interested parties.

Hong Kong-based activist investment firm Oasis Management criticised the CVC proposal, saying that the bid was far below the fair value of Toshiba.

The CVC bid seems to have prompted other interested parties to make a pitch. Rumoured names include KKR and Bain Capital. Bain Capital bought Toshiba’s memory business (now called Kioxia) for $18 billion in 2018 according to the Financial Times.

Certain question about the CEO’s resignation remain, not least his position as a former head of CVC’s Japanese operations, according to a report by Japanese public broadcaster NHK.

Toshiba is one of Japan’s oldest and largest firms, with divisions that range from home electronics to nuclear power stations. Toshiba was forced to sell its profit-making memory chip unit, considered the crown jewel of its business empire, to make up for huge losses.

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