Where next for Toshiba?

1 min read

Shares in Toshiba jumped last week as the company said that it would consider potential buyout offers.

It’s has been battling with major shareholders over its direction for many years and this announcement could provide an exit for major foreign investors. Toshiba has even apparently hired Noumura Securities to act as a financial adviser.

The company’s top shareholder, Effissimo Capital Management, is set to sell its stake to Bain Capital if the US private equity firm launches a tender offer, and this has put increased pressure on Toshiba to consider a possible buyout.

Over the past four years Toshiba has been beset by scandal. Foreign shareholders and the board have engaged in bitter arguments over the company’s direction and last month plans to spin off its devices unit were voted down.

A shareholder-commissioned probe found that Toshiba colluded with Japan's trade ministry – the company is seen as a strategic asset due to its nuclear reactor and defence technology - to block overseas investors from gaining more influence, so foreign investors that stepped in to support Toshiba and its failing nuclear division back in 2017 leaving many feeling frustrated and trapped.

All of which has raised serious concerns as to the future direction of the company with no one appearing to have the votes to force decisions through.

These latest moves could mean that investors will be able to exit the business but should a buy-out happen there would still be questions around the future of the management team and its recently announced plans to boost subscription revenue by tying software to hardware.

The company’s general meeting in June could prove decisive but while there is some light at the end of the tunnel Toshiba’s future remains uncertain.