Toshiba CEO resigns ahead of reported buyout
The former CEO had been an employee of the company looking to take over Toshiba which has worried investors
Toshiba’s CEO Nobuaki Kurumatani has resigned ahead of the company’s reported takeover.
The company’s board has replaced him with Satoshi Tsunakawa who begins the role immediately, although no details were mentioned as to why the previous CEO was asked to step down. Tsunakawa led the company before Kurumatani.
Toshiba’s received a $20 billion takeover bid from CVC Capital Partners last week, a company that Kurumatani has worked at previously. The former CEO had reportedly been under fire over the bid as well as the fact that investors were pressured before shareholder meetings to support desired board nominations, according to Reuters.
Sources said that CVC’s offer to take over the company and retain incumbent management was a way to protect Kurumatani from activist shareholders who were pushing for an independent probe into the allegations.
The takeover offer caused Toshiba managers to lobby against the government as they weren’t happy with the situation. The acquisition would need the approval of the Japanese government in order to go through.
Tsunakawa, who has a better relationship with shareholders, said that the company has to rebuild the trust with its investors.
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He also hinted he wouldn’t stick around for too long: “I am aiming to complete my mission quickly and hand over to the next generation.”
Following the news, Toshiba shares have risen by 5.77%. There are also reports that other groups are considering launching a buyout, such as private equity giant KKR & Co or Canada’s Brookfield Asset Management.
Last year, Toshiba sold its laptop business after 35 years in the industry. It sold its 19.9$ stake in the Dynabook laptop brand to Sharp, after Sharp bought an 80.1% stake of Toshiba’s PC business two years before for $36 million (£27 million). Toshiba became the world’s largest PC manufacturer in the 1990s but began to falter in the 2000s as it couldn't compete with other brands like Dell, HP and Lenovo.
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