Toshiba unveils simpler two-way split proposal

Toshiba updated its plans to split up its operations on Monday, as it took the wraps off a proposal to jump-start shareholder returns in response to investor disquiet.

The Japanese technology giant said it would now only split its devices operation into a separate company, rather than the three-way separation of devices, memory chips and energy and infrastructure that it had previously proposed.

It also said it planned to lift shareholder returns to JPY 300bn (£1.93bn) over the next two years - a tripling of its previous target.

But Reuters said a number of shareholders saw the updated plans as a bid from Toshiba’s board to sidestep opposition to its plans from investors, given the new plan would only require approval from 50% plus one vote.

The three-way split, meanwhile, would have needed a supermajority of at least two thirds of shareholder votes.

Large investors, particularly international hedge funds, have voiced fierce opposition to Toshiba’s plans to split, saying they would rather see the conglomerate be taken private.

“We have not changed the plan to avoid confrontation with shareholders,” said chief executive officer Satoshi Tsunakawa on the first of two days of investor meetings.