BY COMFORT OGBONNA
U.S. activist investor Elliott Management has offered to purchase shares in Toyota Industries at around the current market price from investors who have already agreed to tender their holdings under Toyota Group’s take-private proposal, according to two people familiar with the matter.
The move represents a direct challenge to the existing buyout plan, which Elliott argues undervalues the forklift truck manufacturer. The activist fund has reportedly reached out to a range of shareholders — including suppliers and financial institutions — that had previously signaled support for the Toyota Group’s tender offer. The sources spoke on condition of anonymity because the details are not public. Both Elliott and Toyota declined to comment.
If Elliott succeeds in persuading shareholders to reconsider, it could erode backing for the buyout and complicate Toyota’s efforts to restructure and consolidate control over the company. The situation is being closely watched in financial circles, as it may have broader implications for corporate governance reform in Japan.
The proposed transaction has become a high-profile test case at a time when Japanese regulators are encouraging companies to unwind long-standing cross-shareholding arrangements and improve capital efficiency. Investors and governance advocates see the outcome as a signal of how seriously companies are embracing shareholder value reforms.
Toyota Industries’ shares closed at 20,200 yen (about $130) on Friday before markets shut for a public holiday on Monday. That price stood roughly 7% above the 18,800 yen per share offered by Toyota in its June announcement of the take-private plan. Earlier this month, Toyota extended the offer deadline after failing to secure sufficient shareholder support.
Elliott has publicly argued that Toyota Industries is worth more than 26,000 yen per share, significantly above both the current market price and Toyota’s bid. A regulatory filing from early February showed Elliott owns approximately 7% of the company. Under stock exchange rules, it must disclose changes in its holding whenever its stake shifts by 1% or more.
Toyota revised its offer upward in January, describing the new price as reflective of the company’s intrinsic value. It has also stated that it does not intend to increase the bid again, signaling confidence that the revised terms are fair and final.
As of mid-February, Toyota still required about 9% of outstanding shares to be tendered in order to reach the two-thirds majority necessary to complete the acquisition and gain full control. That threshold has become a focal point in the unfolding contest between management and the activist investor.
Among the shareholders that previously agreed to tender their shares are Ibiden, Mitsui Sumitomo Insurance, and Tokio Marine & Nichido Fire Insurance, according to filings released in January.
Ibiden has separately announced plans to reduce cross-shareholding arrangements as part of its broader governance reforms. In January, the company said that selling its Toyota Industries stake would enhance its own corporate value and benefit its shareholders.
Elliott’s intervention introduces fresh uncertainty into what had been expected to be a relatively straightforward consolidation move within the Toyota Group. The activist’s effort to purchase shares at market value may encourage some investors to reconsider their commitments, especially if they believe the current offer undervalues the long-term potential of Toyota Industries.
The coming weeks are likely to determine whether Toyota can secure the necessary shareholder approval or whether Elliott’s campaign will succeed in reshaping the outcome — a development that could reverberate across Japan’s corporate landscape as companies face mounting pressure to modernize governance practices and prioritize shareholder returns.
SOURCE : REUTERS
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