On the Dash:
- Toyota extended its $35 billion bid to privatize Toyota Industries after falling 9 percentage points short of the required approval threshold.
- Activist investor Elliott Management continues to oppose the offer, arguing it undervalues the company.
- The delay intensifies pressure on Toyota to raise its bid as shares trade above the offer price.
Toyota Group has extended the tender deadline for its bid to privatize Toyota Industries Corp. to March 2 as it seeks additional shareholder support to complete the transaction. The company remains about 9 percentage points short of the two-thirds majority required to finalize the deal, according to a recent filing.
Investors representing roughly 33% of Toyota Industries shares have agreed to tender their stock. Combined with the 25% stake already held by the Toyota group, that leaves the offer just under the threshold needed to move forward. The offer price remains ¥18,800, or about $122.20 per share.
The bid values Toyota Industries at approximately ¥6.1 trillion, or about $39.65 billion. The total privatization plan would cost around ¥5.4 trillion, or roughly $35.1 billion, including ¥4.3 trillion, or about $27.95 billion, for the Toyota Industries buyout portion.
The extension prolongs Toyota’s standoff with activist investor Elliott Investment Management, which has argued the offer undervalues the company. Elliott has advocated for structural changes such as unwinding cross-shareholdings and implementing governance reforms, contending that those measures could significantly increase long-term shareholder value.
Toyota first proposed ¥16,300 per share in June, or about $105.95, drawing criticism from some investors and analysts. Under mounting pressure, the company raised the offer to ¥18,800 per share. Even so, the revised bid remains below Toyota Industries’ recent market price. Shares closed at ¥19,985, or roughly $129.90, up 1.6% on the day of the announcement.
The additional time allows Toyota to secure more tenders, but it also introduces risk. If the stock continues to trade above the offer price, pressure could intensify for a higher bid to win the remaining support.
Toyota Industries is a core company within the broader Toyota group and one of the world’s largest forklift manufacturers. Founded by Sakichi Toyoda to commercialize automated looms, the company is deeply connected to the automaker’s origins. Over the decades, a complex network of cross-shareholdings developed among Toyota group entities.
Japan’s government has encouraged corporations to unwind such arrangements to improve governance, transparency and shareholder returns. The outcome of this privatization effort could signal how legacy industrial groups respond to growing pressure for reform.
(¥1 = $0.0065)
