Toyota’s buyout favors Elliott, raises governance questions

Toyota’s decision to raise its offer for group company Toyota Industries (TICO) has favored activist fund Elliott Investment Management, but concerns remain over minority shareholder rights and corporate governance.

The world’s largest automaker increased its bid to 20,600 yen ($131) per share, valuing TICO at $30 billion. The higher offer convinced Elliott to tender its stake after rejecting an earlier bid of 18,800 yen per share. Some investors argue that even the new price remains below TICO’s potential value, News.Az reports, citing Reuters.

The buyout is designed to allow TICO, a key Toyota supplier, to pivot toward advanced mobility technologies without short-term profit pressures. However, critics say the deal favors Chairman Akio Toyoda, who is increasing his TICO stake to 0.5%, while certain group companies classified as minority shareholders have lowered the voting threshold needed for approval.

Despite these issues, TICO has consulted outside directors, independent firms, and issued three fairness opinions to ensure transparency. Investors acknowledge that the revised offer is an improvement for minority shareholders, though governance concerns persist.

The tender offer requires 42.01% acceptance from minority shareholders (excluding Toyota Motor’s 24.66% stake) and ends on March 16. Analysts say the deal highlights both progress and ongoing weaknesses in Japan’s corporate governance practices.

News.Az 

By Aysel Mammadzada