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UPDATE 2-U.S. hedge fund Farallon calls on Toshiba to get two-thirds of shareholders to back break-up

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(Adds Toshiba comment and line from Farallon statement)

By Makiko Yamazaki

TOKYO, Jan 18 (Reuters) - Farallon Capital Management on Tuesday urged Toshiba Corp to secure the legally required support of two-thirds of its shareholders before the Japanese industrial conglomerate continues with a controversial plan to split in three.

U.S. hedge fund Farallon, Toshiba's third-largest shareholder with a stake of more than 6%, joined the second-largest investor 3D Investment Partners in demanding a higher threshold for the break-up plan.

Since Toshiba is nearly 30% owned by foreign funds, many of which appear to oppose the split, setting the 67% bar could force the conglomerate to ditch its plan.

Toshiba should seek approval from two-thirds of its shareholders "before it risks expending significant time, cost and management resources on the separation plan," Farallon said in a statement.

"The separation plan without shareholder trust would achieve nothing but the creation of three discrete companies, with each inheriting the same issues as Toshiba," it said.

Toshiba is preparing to hold an extraordinary shareholder meeting (EGM) in March to gauge shareholder support for the break-up plan, set to be completed by March 2024. But details of the meeting have been undecided, including the level of shareholder support it will require to continue with the plan.

In a statement to Reuters, the company said it would announce the EGM date and agenda when it decides on the convocation.

With its demand, Farallon is effectively forcing Toshiba to bring forward by more than a year a legally mandated vote requiring backing from two-thirds of shareholders. Officially, the vote is not slated to be held until the annual shareholders' meeting in 2023.

The break-up plan was announced last November after a five-month strategic review following years of accounting scandals and governance issues that undermined investor confidence and saw Toshiba's market value more than halve, to around $18 billion, from an early 2000s peak. (Reporting by Makiko Yamazaki; Editing by Kirsten Donovan, Susan Fenton and Jonathan Oatis)

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