T Toshiba CEO Nobuaki Kurumatani to step down amid CVC bid

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T Toshiba CEO Nobuaki Kurumatani to step down amid CVC bid

Tokyo -- Toshiba Corp Chief Executive Nobuaki Kurumatani plans to step down as other board members consider his future at the industrial conglomerate amid controversy over a$ 20 billion buyout bid from his former employer, CVC Capital Partners, a source with knowledge of his decision said.

Kurumatani, who has run the company for three years, faces a board meeting on Wednesday that will consider removing him according to the source and another one with knowledge of the discussion. The local media said company Chairman Satoshi Tsunakawa was a possible successor.

The sources asked not to be identified because they are not authorised to speak to the media.

Kurumatani's departure could overturn CVC's offer to take the Japanese company private last week. Such a takeover could protect him and others from pressure from activist shareholders seeking an independent investigation into whether management pressured investors to support their decisions.

An internal investigation by Toshiba found no evidence that its executives were involved in attempts to pressure shareholders.

In a tender offer, a separate source said last week that CVC is considering a 30% premium over Toshiba's current share price.

This would value the deal at nearly 2.3 trillion yen. This offer has been criticised by some activist shareholders as too low.

Three weeks ago, a stockholder meeting voted for an independent probe into the company. The Hong Kong-based activist Oasis Management criticized the CVC's proposal as far below fair value in a letter to Toshiba Chairman Osamu Nagayama, seen by Reuters on Tuesday.

It urged the company to seek further offers for more than 6,200 yen per share, far above the offer of CVC of around 5,000 yen.

If the company is open to bids, we believe there will be other bidders interested in acquiring Toshiba, Oasis said in the letter.

Farallon Capital Management also asked Toshiba to seek multiple offers, though only Oasis has suggested a price so far.

The US investment firm CVC plans to make an offer to Toshiba that is more attractive than KKR's bid, reported the Financial Times on Tuesday.

Oasis also asked that the company set up a special committee to discuss the CVC offer and urged that Kurumatani, as a former CVC executive, be excluded from the process. Kurumatani, a former banker at Toshiba's main lender, Sumitomo Mitsui Financial Group, led the Japanese subsidiary of CVC before joining Toshiba.

A senior adviser at CVC also serves on the board of directors of the company.

Toshiba shares have been well below CVC's likely offer price after hitting a four-year high last week, with the stock closing at 4,595 yen on Tuesday.

Separately, the Tokyo Stock Exchange cited block trades of 72 billion yen of Toshiba shares on Friday, representing approximately 3.4% of the company's market value.

Any acquisition of Toshiba, one of Japan's few manufacturers of nuclear power reactors and a maker of defence equipment, would need government approval.

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