Toshiba Sells Toshiba Tec to Bolster Finances?

Originally published at wirthconsulting.

Investment Firm Asks Toshiba to Sell Toshiba Tec

On December 27th, Reuters reported that Hong Kong-based activist fund Argyle Street Management asked Toshiba Corporation of Tokyo, Japan, to sell more non-core businesses, such as office machinery company Toshiba TEC, in order to bolster its finances.

Argyle Street Management stated in a letter to Toshiba CEO Nobuaki Kurumatani and shown to Reuters: “We believe that further firm commitments to divest other non-core businesses (such as Toshiba TEC for instance), would be well received and affirms management’s commitment to decisive execution of its plans.”

The fund also reiterated its call for the company to boost share buybacks to 1.1 trillion yen ($901.5 million), calling its current 700 billion yen repurchase launched in November “grossly insufficient.”

Toshiba had substantial excess capital, and a higher buyback would make sense “especially with the current depressed share price of Toshiba”, the fund said.

Toshiba didn’t comment on the proposal.