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Acquisition Bid From CVC For Toshiba Results Its CEO Resignation

Acquisition Bid From CVC For Toshiba Results Its CEO Resignation
The controversy of a $20 billion buyout bid placed for Toshiba Corp by the privately owned investment company CVC Capital Partners resulted in the resignation of the CEO of the company Nobuaki Kurumatani.
With emergence of more news that there were more bidders for the conglomerate that were planning to also place bids for the Japanese firm resulted in a surge in the share price of the company.
The Japanese company said in a statement on Wednesday that following the sudden resignation of Kurumatani, the new chief executive will be its Chairman Satoshi Tsunakawa. There was however no reason for the sudden resignation of Kurumatani provided in the statement offered by the company. However, the bid from CVC, the former employer of the outgoing CEO Kurumatani, had drawn a much fire while his relationship with the large activist shareholder base of the Japanese company was also not good.
According to analysts and experts, the resignation of Kurumatani could upend the plans of the CVC and its offer which it had made last week in which it had said it wanted to take Toshiba private. This assumes more importance because of reports since then of rival bids being planned to be offered by others as well.
According to a report published by the Financial Times based on sources with knowledge of the matter, an acquiring bid offer for Toshiba is aloe being planned by the private equity giant KKR & Co which was reported to be higher than that placed by CVC.
And according to a report published in Bloomberg News, the preliminarily stages of exploring an offer for Toshiba is also being prepared by Canada’s Brookfield Asset Management Inc, said the report quoting a person with knowledge of the matter.
There were no comments of KKR Japan and Brookfield Asset Management in the reports.
If the bid from CVC for the acquisition goes through, it would shield Kurumatani and other managers from pressure from activist shareholders, said reports quoting sources and industry analysts. An investigation into whether management pressured investors to support their decisions has been initiated by the company under pressure from the activist shareholders.
Shares in Toshiba were trading 7% higher at 4,900 yen, not far off the 5,000 yen per share level reportedly offered by CVC Capital.

Christopher J. Mitchell

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