On the Dash:
- Elliott and other investors say Toyota’s higher bid still undervalues Toyota Industries.
- Shares trading above the tender price signal continued resistance from minority shareholders.
- The outcome could influence future buyouts and governance reforms across corporate Japan.
On Thursday, Elliott Investment Management rejected the Toyota Group’s revised offer to take Toyota Industries private, calling the bid inadequate and urging other shareholders to oppose the transaction.
Toyota recently raised its tender offer to 18,800 yen ($118.50) per share, a 15% increase from its initial proposal, after facing pressure from minority investors. Despite the higher bid, Toyota Industries shares climbed as much as 6.8% to 19,225 yen, trading above the offer and reinforcing demands for a larger premium.
Elliott, the most vocal opponent, said in a statement that the revised offer still “very substantially” undervalues the company and is not in the best interest of minority shareholders. The U.S.-based activist fund also said Toyota Industries is worth more than 25,000 yen per share and confirmed it does not plan to tender its stake under the current terms.
The opposition campaign has gained momentum in recent months as UK-based fund Sloane Robinson, another shareholder, also publicly called for a valuation of 25,000 yen per share. Additionally, Elliott disclosed a 5% stake in November and has since sought support from other investors in Japan.
The tender offer runs through Feb. 12, after being delayed from December due to antitrust reviews in multiple jurisdictions. If completed, Toyota Industries would fall under Toyota Fudosan, an unlisted real estate company chaired by Akio Toyoda, who also serves as chairman of Toyota Motor Corp.
Toyota Industries manufactures textile looms and forklifts and holds significant cross-shareholdings within the Toyota group. Elliott and other critics argue that those holdings justify a substantially higher valuation. Analysts have said the buyout would strengthen the founding family’s influence over Japan’s largest corporate group and rank among the country’s largest acquisitions.
It remains unclear whether the offer will attract enough support from minority investors. Other shareholders have also not disclosed their intentions, and analysts suggest Toyota may need to raise its bid further to secure approval.
