Toshiba pauses breakup plan, considers going private
2 Min Read
For some time, the Japanese firm was planning to go for a breakup plan which has been paused for now.
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Toshiba headquarters
After last month's shareholder vote against Toshiba's breakup, the company said it is suspending its plan and now considering going private instead.
In a statement on Thursday, Toshiba announced that its management team will hold discussions with private equity funds and other possible investors regarding potential offers.
A new committee formed for that matter will "identify the privatization offer that is best for our diverse stakeholders" and report back before the annual shareholders' June meeting.
The firm also said that the management team will be developing a new business plan and announcing it before the meeting.
This decision came after shareholders voted against a proposal to split the company into two.
Toshiba, which once represented Japan's business and tech prowess, has witnessed a series of scandals, shocking resignations, and financial issues over the past year.
A preliminary proposal to split the company into three has met stiff resistance; then the plan was revised.
Some major shareholders argued that instead of improving the firm's governance, a spin-off will possibly add to Toshiba's woes due to the need to create more managerial posts at smaller units.
As for others, they wanted a buyout instead, following an abandoned takeover offer from private equity fund CVC Capital Partners last year.
Bain Capital is examining a bid for Toshiba, and the private investment firm has already received support from one key shareholder.
It could face obstacles though considering some of Toshiba's businesses' national security implications.
