Activist Toshiba directors selected to serve as directors

The likelihood of privatization as a staunch opponent of a buyout is increased by the fact that candidates from its activist shareholders have been selected to serve as directors.

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The Tokyo-based firm nominated an executive from Farallon Capital Management and Elliott Management Corp. The former Chief Executive Officer Satoshi Tsunakawa will leave the board.

The candidates could help smooth the path for a sale of private equity, as the conglomerate seeks offers on privatization and other strategic alternatives, if elected by shareholders at the annual meeting in June.

In a statement, Raymond Zage, chairperson of the nomination committee, said that having shareholder representatives join the board strengthens the alignment between shareholders and management.

The announcement of the director slate was delayed earlier this month because the company said it needed more time. Proposed candidates met opposition from some Toshiba executives for being close to activist shareholders, broadcaster TV Tokyo reported at the time.

Eijiro Imai, a managing director at Farallon Capital Japan, is one of the proposed directors candidates, while Nabeel Bhanji, who hails from Elliott, is another.

Akihiro Watanabe, chairman, managing director and chairman of Asia corporate finance at Houlihan Lokey, was nominated as chairman of the board.

Tsunakawa, who is leaving, was one of the most vocal opponents of going private within Toshiba. Tsunakawa's alternative vision for the firm, to split in two, was voted down by stock owners in March.

Toshiba is looking at other strategic options and has a deadline on May 30 for non-binding proposals from investors, including bids to go private.

People familiar with the matter told Bloomberg News that Japan Investment Corp., a government-backed fund, is considering making an offer. Among the buyout firms that are considering bids are Bain Capital, Blackstone Inc., CVC Capital Partners and KKR Co., according to Bloomberg.

Read more: Japan State-Backed Fund JIC Is Said to Explore Toshiba Bid

Toshiba has previously opposed activist shareholder candidates.

When Effissimo Capital Management Pte. The shareholders of the company's largest stock holder, who sought to put one of its co-founders on Toshiba's board in 2020, rejected it. Effissimo called for independent investigators to be appointed to look into the vote, which won a landmark shareholder vote last year. The investigation found that Toshiba management worked hand in hand with government allies to sway the outcome, findings that four Toshiba board members described as deeply disturbing. Mark Zuckerberg is not caught on Instagram to try and catch TikTok.

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