Toshiba has agreed to shake up its board, nominating executives backed by two activist shareholders a day after it was revealed that a state-backed fund was considering a bid for the Japanese conglomerate.
Former chief executive Satoshi Tsunakawa will be replaced as chair of the board by Akihiro Watanabe, an executive at mergers and acquisitions advisory group Houlihan Lokey.
Alongside Watanabe, Eijiro Imai, managing director of the Japanese arm of US investment firm Farallon Capital, and Nabeel Bhanji, a senior portfolio manager at hedge fund Elliott Management, will also become non-executive directors.
Toshiba has been mired in scandals and management crises since 2015, when it was found to have committed accounting fraud. The 146-year-old conglomerate has subsequently been subjected to a takeover battle that could result in the largest private equity deal in Japanese history.
The tussle over Toshiba has pitted management against some of the largest global activist funds and has been closely watched as a test of Japanese corporate governance standards.
The company faces a May 30 deadline for potential acquirers to submit their bids, with possible buyers including US private equity group Bain Capital, KKR and Blackstone.
The state-backed Japan Investment Corporation is also considering a takeover, although people familiar with the process say the fund would probably team up with one of the large overseas PE buyers.
MBK, a Seoul-based private equity firm, has become the latest to submit a bid, according to two people with knowledge of the discussions. MBK declined to comment.
The board shake-up will probably speed up the deal as Tsunakawa has opposed the process, citing concerns over public contracts and sensitive technologies.
Underscoring tensions within the company, Toshiba had planned to reveal the candidates earlier this month but cancelled the announcement hours before it was scheduled to take place, saying more time was needed for the nominations.
Raymond Zage, the Toshiba board director who chairs the committee that nominated the board members, said Watanabe would provide “expertise in evaluating strategic alternatives”, which could include “complex transactions across multiple geographies and multiple regulatory environments”.
Imai and Bhanji would ensure any transactions were “considered from the perspective of all stakeholders”, he added.
The board candidates will be formally selected at an annual meeting scheduled for June.
The take-private deal is unlikely to conclude soon, according to people involved in the discussions. This is partly because the bidders need to form a consortium acceptable to the Japanese government because of Toshiba’s involvement in sensitive sectors, ranging from nuclear to defence to semiconductors.
Bankers advising Toshiba in the process are Nomura, JPMorgan and Mizuho.
