Toyota raised its offer for Toyota Industries Corp. (TYIDY) to ¥18,800 per share ($118.50), a 15% increase, after pressure from a group of vocal minority shareholders. However, the company’s shares rose as much as 6.8% on Thursday to ¥19,255, reinforcing calls from some investors for a larger premium, News.Az reports, citing Bloomberg.
Elliott, the most outspoken critic of the proposal, said on Thursday that the updated tender offer price continues to “very substantially” undervalue Toyota Industries and does not serve the best interests of minority shareholders. The U.S.-based activist fund stated that the company’s value exceeds ¥25,000 per share.
“Elliott does not intend to tender its shares under the current transaction terms and will be encouraging other shareholders not to support the tender,” it said.
Hugh Sloane of UK-based fund Sloane Robinson, which owns stock in Toyota Industries, is also arguing for ¥25,000 per share.
“Toyota is trying to acquire Toyota Industries on the cheap,” Sloane said. “This will encourage activists to press the trade.”
The tender offer begins Thursday and will run through Feb. 12, with the outcome potentially shaping future buyouts across corporate Japan. If completed, the company, which makes textile looms and forklifts, will fall under the control of an unlisted real estate company called Toyota Fudosan Co., which is chaired by Akio Toyoda, who also leads the board of Toyota Motor Corp. and is the grandson of the carmaker’s founder.
The offering had been scheduled to start in December, but was postponed after the approval process was delayed by antitrust regulators in various countries.
When the Toyota group announced its take-private bid last June, its offer translated into a transaction valued at around ¥4.7 trillion, an 11% discount to its market capitalization. Critics immediately demanded more transparency into a deal that would strengthen the founding family’s influence over Japan’s largest business group and amount to one of the largest acquisitions on record anywhere.
The protest campaign got a shot in the arm in November, when Elliott revealed it had built a 5% stake in Toyota Industries. Weeks later, Bloomberg News reported the investor had begun approaching other stakeholders in Japan to build support to fight the acquisition.
Elliott has sought to build a consensus around the idea that Toyota Industries deserves a much higher premium in part because it owns about ¥6.1 trillion worth of shares in other companies, mainly within the Toyota group.
