Hedge fund Elliott builds stake in Toshiba

NEW YORK/TOKYO (Reuters) -Hedge fund Elliott Management said it has built a stake in troubled Japanese industrial conglomerate Toshiba Corp, which is undertaking a strategic review amid pressure from other shareholders.

FILE PHOTO: Toshiba’s logo is seen at an industrial area in Kawasaki, Japan, January 16, 2017. REUTERS/Kim Kyung-Hoon

Elliott, one of the world’s most powerful activist investors, which oversees some $48 billion in assets, said in a statement to Reuters it is now a “significant” investor in Toshiba.

The New York-based firm’s announcement comes just months after Effissimo Capital Management, Farallon Capital Management and other shareholders ousted Toshiba’s chairman here after the company was found to have colluded with the Japanese government to put pressure on foreign investors.

“Our investment in Toshiba reflects our strong conviction in the company’s underlying value,” Elliott, which prefers to conduct its negotiations out of the public spotlight, said in the statement.

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

A Toshiba spokesperson said the company does not disclose communications with its shareholders.

Toshiba has been in talks with financial and strategic investors, including U.S. private equity firm KKR & Co Inc, to seek their ideas for a new strategy.

Japan has recently become a popular hunting ground for U.S. activist investors, with Third Point targeting 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.

During the first half of 2021, 10 campaigns were launched at Japanese companies, according to data from investment bank Lazard.

Toshiba launched a full review of its current assets after dismissing in April a $20 billion takeover bid from CVC Capital Partners. The results of the review will be presented when the company announces a new midterm business plan in October.

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