Toshiba chair questions CVC bid after CEO quits

Toshiba's chairman expressed doubts about CVC's proposed $20bn bid for the Japanese conglomerate after the sudden departure of the company's chief executive.

Nobuaki Kurumatani quit as CEO on Wednesday, Toshiba said in a statement. Satoshi Tsunakawa, who was CEO before Kurumatani, has replaced him.

Kurumatani's departure followed a shareholder rebellion in March and amid signs that the company's board is split over CVC's approach, which would be the biggest leveraged buyout in Japan's history. Kurumatani was CVC's head in Japan and a senior adviser to the private equity group is on Toshiba's board.

CVC claims it will submit a more detailed proposal but it is impossible to evaluate the proposal at this point, Toshiba's board chairman Osamu Nagayama said, according to the Financial Times. "The initial proposal notes that the management will be maintained. With Mr Kurumatani resigning we don't know what their thinking is now."

The FT said CVC would go ahead with the bid as planned and that it would submit a formal proposal as early as Friday. Nagayama was part of a faction at Toshiba that was unhappy about Kurumatani's handling of the company, the FT said.

Toshiba has been under pressure for more than five years after a $1.3bn accounting scandal pushed it to a record loss. The group came close to collapse two years ago. CVC made its approach on 7 April and Toshiba said it would seek more details.