Toshiba's top investors signal strident opposition to planned two-way split

They’re not bothering to be particularly polite about it either

Toshiba's plan to split itself into two companies has been opposed by two significant groups of investors.

The Japanese conglomerate first planned to split into three entities, but that plan was poorly received, so management went back to the drawing board and came up with a new strategy to split into two companies.

That plan has also earned investors' ire.

Effissimo Capital Management – a Singapore-based firm that is thought to hold almost ten per cent of Toshiba stock and has in the past agitated strongly for change at the Japanese company – has popped out a press release stating it will vote against the split.

"The Separation may ultimately damage Toshiba's medium- to long-term corporate value," Effissimo's announcement argues, adding that it does not consider Toshiba's management up to the job of devising a strategy that will advance investors' interests. The release also argues that Toshiba's current CEO hasn't been put to the test of a vote of confidence, and that other leaders can't be held accountable if the split doesn't deliver.

3D Investment Partners –, another Singaporean entity that is Toshiba's second-largest shareholder with around 7.2 per cent of its scrip – has published a presentation [PDF] that also opposes the conglomerate's plan.

That document asserts that Toshiba management's strategic review lacked transparency and objectivity, and suggests the company is "willing to disenfranchise its shareholder base."

To back that assertion, the presentation reveals that private equity firms have dangled offers for Toshiba that represent a premium on its current share price, but that the company has acted in ways that make it impossible for such firms even to present their plans.

A third entity – influential corporate governance player Institutional Shareholder Services Inc. – has flagged its opposition to the proposed split.

In a research note published this week and obtained by The Register, ISS analysts share the following very unflattering opinion about Toshiba's prospects:

Years of corporate governance turmoil and attempted restructuring in the public eye, a split shareholder base, and an uninspiring management track record raise significant skepticism as to whether the current plan is superior to a privatization proposal.

The Register readers will doubtless have done their sums and noted that 3D and Effissimo's shareholdings collectively account for around 17 per cent of Toshiba stock – far from a majority.

Toshiba is therefore continuing with its plan to stage a March 24 Extraordinary General Meeting at which the two-way split will be put to a vote.

It is unclear which way that vote will go. But given Toshiba's years-long run of scandal and division, The Register feels certain the result won't put the matter to bed. ®

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