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Toshiba Machine Co. is bracing for “a very tough battle” with controversial activist investor Yoshiaki Murakami on March 27, when shareholders will meet to decide the outcome of one of the nation’s highest-profile takeover battles in recent years.

President Shigetomo Sakamoto said in an interview that it won’t be easy to sway a majority of shareholders against the activist. He needs over 50 percent of them to vote in favor of the company’s so-called poison pill, a plan to issue new stock to existing investors to fend off the takeover bid. Falling short of that would effectively hand over the reins of the company to Murakami, who launched a tender offer to boost his stake to about 44 percent, Sakamoto said.

Over the past month, Toshiba Machine has waged a public campaign to get investors on its side. The company promised to reduce its workforce by as many as 300 people and raise its operating profit margin to 8 percent by fiscal 2023, more than double its average over the past five years.

In its midterm plan last month, Toshiba Machine called for ¥30 billion ($279 million) in capital and research spending to ensure long-term growth. It also pledged ¥15 billion in shareholder returns, including a ¥3 billion special dividend next year if it prevails against the activist.

“I’ll be honest, this is going to be a very tough battle,” said Sakamoto, who took over as president last month. “Getting the majority won’t be easy.”

The response from investors has been mixed. While overseas shareholders are generally supportive, domestic financial institutions have been wary of taking drastic measures, Sakamoto said. Toshiba Machine’s shares have slid more than 22 percent since Murakami announced his bid in January and have been consistently below his offer price of ¥3,456 since the company announced its poison pill. They closed at ¥2,880 on Thursday.

“The shareholders face a choice between the short-term return championed by Mr. Murakami and investments aimed at long-term return, which we stand for,” Sakamoto said. “It is up to them to judge whether this company has growth potential.”

The charm offensive is running up against rising concerns about the coronavirus, which has sent stock markets tumbling around the world. Toshiba Machine’s biggest exposure is to the auto sector, where slowing demand for cars and the delay in adopting electric vehicles would impact orders for its manufacturing equipment. Sakamoto acknowledged that cautious sentiment among investors would work in Murakami’s favor.

Murakami has previously argued that Toshiba Machine’s proposal would require a two-thirds majority, something the firm disputes. Murakami extended his takeover offer until April 16, to allow for consideration at the shareholder meeting later this month.

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