Hong Kong-based activist investor Oasis Management Co. said Tuesday that British private equity firm CVC Capital Partners' planned takeover bid of Toshiba Corp. at 5,000 yen ($45) per share is "too low."
Oasis, which has held Toshiba shares since 2016, believes a price of more than 6,200 yen per share would be more appropriate in a deal likely to be worth more than 2 trillion yen, saying, "We believe this price (of 5,000 yen) is only an opening bid and is far below fair value."
Last week, CVC proposed making the Japanese electronics and infrastructure conglomerate private by buying Toshiba shares from other investors, sources close to the matter said. A buyer typically pays a premium in a tender offer.
The Hong Kong-based investor did not disclose how much of a stake it has in Toshiba in its letter to Osamu Nagayama, chairman of the Japanese company's board.
Oasis also asked Toshiba to set up a special committee to discuss the tender offer, excluding President and CEO Nobuaki Kurumatani and outside board member Yoshiaki Fujimori to "secure fairness to the deal."
Kurumatani served as chairman of CVC's Japan unit before joining Toshiba and Fujimori is an adviser for the British investment firm's arm in Japan.
Toshiba is expected to set up later this month a special committee comprised of outside experts that will independently review the buyout offer, according to the sources.
CVC plans to ask Japanese firms including the state-backed fund Japan Investment Corp. and Development Bank of Japan to join the takeover bid and start it in July or August, assuming that its buyout proposal will be approved at a Toshiba general shareholders' meeting scheduled in June, the sources said.
However, Nagayama said Friday the board members expect "such a financing process would require a substantial amount of time and involve complexity for consideration."
The buyout plan would also need to be screened and approved by the Japanese government due to national security concerns as Toshiba has nuclear power and defense businesses.
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