Toshiba puts going private on the table

Appoints independent committee and gives angry investors most of what they want

Toshiba has decided it will consider proposals to take the company private, and devise yet another strategy to improve its performance, suggesting alternative proposals for the company's future will be revealed – and perhaps decided - in late June.

The beleaguered Japanese giant yesterday announced [PDF] it has created a special committee to consider any offers for the company.

Membership of the committee is only open to Toshiba's independent directors – an important decision because investors have already rejected two plans cooked up by the company's management, and expressed displeasure at many management decisions.

Management is still in the picture, to devise a new corporate strategy and to lead "discussions with potential investors and sponsors" that will start ASAP.

As Bain Capital has already started to explore taking Toshiba private, it is clearly a potential investor and Toshiba has begrudgingly signalled its openness to the prospect of going private.

The committee will also negotiate with investors, alongside management. The jobs of analyzing any offers to buy and/or privatize Toshiba, and to recommend which is in the best interests of shareholders, also fall to the committee's six members.

The planned sales of Toshiba's elevator and lighting businesses have been paused while the company's future is considered. Divestment of the company's air conditioning business will continue.

The appointment of the committee and declaration of openness to a private sale delivers most of what investors like 3D Investment Partners and Effissimo Capital Management have called for in recent weeks. Such critical voices have become increasingly strident since two previous turnaround plans were dismissed by investors, leaving Toshiba unable to move on from a decade of scandal and underperformance.

The company's annual general meeting is set for June 25, and investors have been told they'll know of any buyout plans and new strategies before that date. That Saturday meeting is therefore set to be quite a moment in Toshiba's 146-year history – maybe even one it won't survive. ®

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