NEW YORK/TOKI (Businesshala) – Hedge fund Elliott Management said it owns a “significant” stake in troubled Japanese industrial conglomerate Toshiba Corp, which is conducting a strategic review amid pressure from other investors that may include selling the company. can.
Elliott, one of the world’s most powerful active investors who oversees nearly $48 billion in assets, has invested in Toshiba since 2017, but its stake has recently dropped to just under 5%, making it the top 10 became investors, those who are familiar with the firm’s investments. said.
The New York-based firm’s announcement comes just months after Efisimo Capital Management, Farallon Capital Management and other shareholders ousted the Toshiba chairman after the company colluded with the Japanese government to pressure foreign investors.
“Our investment in Toshiba reflects our strong belief in the underlying value of the company,” Elliott said in the statement.
The company is expected to update investors on its plans over the next weeks and release earnings in November. As the deadline draws closer, Toshiba has told shareholders that it is looking at three possible ways to try and unlock value, the sources said.
Elliott has worked with management and the board and said in a statement that the firm has been “encouraged by the creative nature of our association with the company in recent months.”
A Toshiba spokesperson said the company does not disclose communications with its shareholders.
In their discussions, sources said Elliott suggested to Toshiba that the company’s stock could be worth 6,000 yen, which would mark a 27% increase from Thursday’s close of 4,715 yen.
Sources said three possible avenues for Toshiba could include an outright sale to a private equity firm, a company breakup led by its management team, or a combination of the two options.
Sources said current shareholder frustration with the company could make a management-led buyout very unlikely, with a private equity firm instead playing the role of either an outright buyer or a large minority investor.
Toshiba began a full review of its existing assets in April after it rejected a $20 billion takeover bid from CVC Capital Partners. The results of the review will be presented when the company announces a new medium-term business plan in October.
Since then Toshiba has been in talks with financial and strategic investors, including US private equity firm KKR & Co Inc., to seek their ideas for a new strategy.
Japan has recently become a popular hunting ground for US active investors, with Third Point targeting the Sony Group and Olympus appointing three foreign directors after ValueAct took a stake in the company.
ValueAct has also invested in Nintendo and Seven&I Holdings.
Elliott previously worked in Japan, when he created a nearly $3 billion stake in SoftBank in early 2020. This reduced stake as the stock price rose, the hedge fund remains invested in SoftBank.
During the first half of 2021, 10 operations were launched in Japanese companies, data from investment bank Lazard showed.