The proposal to seek private equity buyout offers or a minority investment was made by Singapore-based 3D Investment Partners, Toshiba’s second-biggest shareholder
Toshiba Corp shareholders on Thursday voted against its plan to break up the company while a separate motion backed by activist shareholders calling for the conglomerate to solicit buyout offers also failed to gain sufficient support.
The proposal to seek private equity buyout offers or a minority investment was made by Singapore-based 3D Investment Partners, Toshiba’s second-biggest shareholder and was supported by top shareholder Effissimo Capital Management and number three shareholder Farallon Capital Management.
The stalemate leaves Toshiba with no clear direction.
Travis Lundy, Analyst, Quiddity Advisors, publishes on Smartkarma, Hong Kong: If the separation plan had passed, that would have been a failure of activism. 3D’s proposal not passing is simply a lack of complete activism success. It doesn’t mean it is over, and it doesn’t mean Toshiba can’t act on some portion of 3D’s proposal. Toshiba has to come up with some other means by which they can measure success.
Justin Tang, Head of Asian Research, United First Partners, Singapore, said: This outcome highlights the deep divisions not only at the board but also at the shareholder level and will further delay its ambition to put management missteps and voting scandals in the rear-view mirror.
Tang said: We are of the view that Toshiba will continue to work towards reviving its plans for a spin-off. At the same time, activist investors will only be emboldened and take heart that they were able to defeat the split plan. It is likely that they will keep up the pressure and could conceivably add more to their holdings in the days ahead if only to build up their position.
Jesper Koll, Expert Director, Monex Group, Tokyo, said: Today’s result, with both proposals being rejected, shows the wisdom of the crowd, shows that shareholders can’t run a company. They can influence a company.