Farallon requests Toshiba Corporation Convene an EGM to Explain and Seek Shareholder Approval Regarding Significant Changes to the Toshiba Next Plan Relating to a New One Trillion Yen Growth Investing Strategy

PR87407

SAN FRANCISCO, Dec. 25, 2020 /PRNewswire＝KYODO JBN/ --

Today, an affiliate of Farallon Capital Management, L.L.C. ("Farallon")

requested Toshiba Corporation ("Toshiba" or the "Company")(6502.T) convene an

extraordinary general meeting of shareholders ("EGM") to seek shareholder

approval regarding significant changes to the Toshiba Next Plan ("TNP")

relating to a new one trillion yen growth investing plan.

Farallon has continued constructive discussions with Toshiba as a major

shareholder since 2017, including recommending the appointment of Mr. Raymond

Zage, who previously served as CEO and Managing Director of Farallon Capital

Asia, to the Toshiba Board of Directors.  Mr. Zage was appointed as a director

of Toshiba at the Annual General Meeting held in June 2019.

Farallon commends Toshiba for successfully reinforcing its internal controls,

improving its financial condition, reviewing its business portfolio, and

improving its profitability through structural reforms.  As set forth in the

TNP under the leadership of CEO Nobuaki Kurumatani, these initiatives were

implemented with the purpose of "maximizing enterprise value as an

infrastructure services company."

Farallon is, however, deeply concerned that on November 11, 2020, Toshiba

suddenly announced a growth strategy that was materially different from that

described in the TNP.  Specifically, Toshiba announced that funds amounting to

approximately one trillion yen will be used for large-scale M&A, without

providing any reasonable explanation as to why such a strategy change was

warranted or how it would increase corporate value.  This shift was in marked

contrast to the growth strategy committed to and announced in the TNP that

focused on a disciplined capital policy and targeted growth through organic

expansion and small-scale, programmatic M&A (instead of large-scale M&A).

The current directors of Toshiba are appointed on the basis of a public

commitment to the TNP and a significant change to the TNP not approved by

shareholders is wholly inappropriate and a rebuke of the trust shareholders

have placed in management and the Board to implement the TNP. Shareholders have

reason for concern.  Toshiba has recorded a total of approximately 1.8 trillion

yen of impairment losses in the past 20 years resulting from heedless growth

investments through large-scale M&A, which have led to a reduction of

shareholder capital ³and a crisis of solvency.  Shareholders have already

expressed views around the Company's capital policy.  At the Company's Annual

General Meeting in July 2020, a proposal to amend Toshiba's Articles of

Incorporation to enable a general meeting of shareholders to resolve matters

concerning Toshiba's capital policy was adopted with near unanimous affirmative

votes (97.74%).  This result strongly indicates that the shareholders of

Toshiba believe that significant changes to the TNP around Toshiba's capital

policy should not be made by management without shareholder input, but instead

should be determined through a general meeting of shareholders.

Accordingly, Farallon has concluded that since Toshiba has significantly

changed the TNP without any reasonable explanation to its shareholders (and has

not even offered clear criteria or a policy for how it proposes to evaluate

such large-scale M&A), it is imperative that Toshiba's Board fully articulate

its intentions, explain its new growth strategy and seek shareholder feedback

on those plans.  Until shareholders approve a revision to the TNP, Toshiba

should continue with the promises it made and pursue a disciplined capital

policy focusing on organic growth and programmatic M&A.

Farallon has always sought to have a constructive dialogue with Toshiba, with an aim

to improve mid to long-term enterprise value, and will continue to seek to do so.

About Farallon

Farallon Capital Management, L.L.C., is a global investment firm founded in

1986 and registered as an investment advisor with the United States Securities

and Exchange Commission since 1990.  Farallon seeks investments across asset

classes and around the world through a process of bottom-up fundamental

research and analysis emphasizing capital preservation.  More information on

Farallon is available at www.faralloncapital.com.

Disclaimer

Information contained herein is based on public information. Chinook Holdings

Ltd., Farallon Capital Management, L.L.C. and their affiliates and

representatives (collectively, "Farallon") do not guarantee its accuracy,

completeness, adequacy or exhaustiveness.  This press release represents the

views, estimates and opinions of Farallon only, which may change.  It should

not be relied upon for any purpose and should not be construed as investment,

financial, legal, tax or other advice.  Nothing in this press release should be

construed as an offer, invitation, marketing of services or products,

advertisement, inducement or representation of any kind, nor as investment

advice or a recommendation to buy or sell any investment products or make any

type of investment in securities.  

This press release should not be construed as soliciting any other Toshiba

shareholder to authorize Farallon or any third party to exercise voting rights

on such shareholder's behalf with respect to any matter proposed to be

presented to shareholders as indicated in the Request for Convocation of

Extraordinary Meeting of Shareholders. This press release is not intended and

should not be considered to solicit, encourage, induce or seek for Toshiba

shareholders to authorize Farallon or any other third party as their proxy in

exercising their voting rights on their behalf.

Farallon is not soliciting or requesting other shareholders of Toshiba to

jointly exercise their shareholders' rights with Farallon (including, but not

limited to, voting rights). Farallon declares that it does not intend to be

treated or deemed a "joint holder" (kyo-do hoyu-sha) with other Toshiba

shareholders under the Japanese Financial Instruments and Exchange Act.

Media Contacts

Steve Bruce / Taylor Ingraham

ASC Advisors

sbruce@ascadvisors.com / tingraham@ascadvisors.com

+1 203 992 1230

SOURCE: Farallon Capital Management, L.L.C.