Hedge fund Elliott builds stake in Toshiba

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(Businesshala) – Hedge fund Elliott Management said it has staked out a stake in troubled Japanese industrial conglomerate Toshiba Corp, which is conducting a strategic review amid pressure from other shareholders.

FILE PHOTO: The Toshiba logo is seen in an industrial area in Kawasaki, Japan January 16, 2017. Businesshala/Kim Kyung-hoon

Elliott, one of the world’s most powerful active investors that oversees assets worth about $48 billion, said in a statement to Businesshala that it is now a “significant” investor in Toshiba.

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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.

“We have been encouraged by the creative nature of our association with the company in recent months,” it said.

Toshiba is 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.

According to data from investment bank Lazard, during the first half of 2021, 10 operations were launched in Japanese companies.

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.

Reporting by Svea Herbst-Bayliss, Makiko Yamazaki and Tiyashi Datta in Bengaluru; Editing by Shailesh Kuber, Kirsten Donovan

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