Hedge Fund Oasis Says CVC Buyout Offer for Toshiba Too Low

Oasis Management Co. said CVC Capital Partners’ buyout proposal for Toshiba Corp. is too cheap, sending shares of the Japanese conglomerate higher.

The Hong Kong-based hedge fund said the price of 5,000 yen per share mentioned in media reports is below fair value, which should be more than 6,200 yen a share. It urged Toshiba’s board to conduct a fair and open process for all parties interested in buying the company.

Toshiba shares erased losses and rose as much as 2.8% in trading in Tokyo on Tuesday.

“We believe that this price is only the opening bid and is far below fair value,” Seth Fischer, chief investment officer of Oasis, said in a letter to Toshiba provided to Bloomberg.

Toshiba spokeswoman Miyako Hokama declined to comment. A spokeswoman for CVC declined to comment.

CVC has offered about 5,000 yen a share for Toshiba, an executive at the Japanese company, who asked not to be identified discussing confidential information, said earlier this month. Toshiba confirmed it had received a preliminary offer from CVC, without revealing the level of the bid.

Toshiba shareholder Farallon Capital Management expressed similar sentiments to Oasis on Monday, saying the company’s board of directors has a duty to maximize medium to long-term corporate value. Farallon was commenting in a statement in response to the buyout proposal.

Oasis has been a shareholder of Toshiba since 2016, Fischer said in the letter, which did not reveal the size of its stake. The fund said it believes the company has “generally been on the rebound” since an accounting scandal that resulted in the sale of the company’s crown-jewel memory-chip business. The company’s long-term prospects look bright, he said.

Oasis called on Toshiba to establish a special committee to discuss the matter and secure fairness in the deal. It also urged the company to solicit bids from competing private equity firms, financial buyers and other companies.

©2021 Bloomberg L.P.

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