Toshiba CEO steps down, shares surge on bidding war expectations
Toshiba Corp CEO Nobuaki Kurumatani resigned on Wednesday amid controversy over a $20 billion buyout bid from CVC Capital Partners and the conglomerate's shares surged on reports that KKR & Co and Brookfield are also planning offers.
Satoshi Tsunakawa, who previously led the business before Kurumatani and until Wednesday was chairman, will once again assume the helm.
Kurumatani had been under fire over the bid from CVC, his former employer, together with damaging allegations that management pressured investors before a shareholder meeting to support desired board nominations.
CVC's offer to take the scandal-hit Japanese conglomerate private and retain incumbent management was regarded as made to shield Kurumatani and other managers from pressure from activist shareholders who've successfully pushed for an unbiased probe in to the allegations, sources acquainted with the problem have said.
The offer sparked a solid backlash from Toshiba managers and some board members, prompting them to lobby against it to the federal government, said among the sources. The sources declined to be discovered because of the sensitivity of the problem.
"Tsunakawa gets the trust of varied stakeholders," Toshiba Board Chairman Osamu Nagayama told a news conference adding that Kurumatani had told the board that he was stepping down as the company's recovery was now firmly set up.
Nagayama also said CVC's April 6 proposal was unsolicited, lacked substance and required cautious consideration.
Toshiba would consider establishing an unbiased committee of external directors after getting a formal proposal from CVC, he added.
Shares in Toshiba 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.
Other suitors seem to be waiting in the wings.
Private equity giant KKR & Co is considering a buyout offer that would exceed CVC's, the Financial Times has reported, citing several people briefed on the plans.
Canada's Brookfield Asset Management Inc is in the preliminarily stages of exploring an offer, Bloomberg News reported, citing a person with understanding of the matter.
A representative for KKR Japan declined to comment. Brookfield didn't immediately react to a request to comment.
