What is Elliott Investment Management's stance on the Toyota Industries buyout?

Elliott Investment Management is firmly opposing the Toyota group's buyout proposal, arguing that it significantly undervalues Toyota Industries and urging shareholders to reject the deal.

Why are some Toyota shareholders supporting the below-market buyout offer?

Some Toyota affiliates and major insurers plan to tender their shares at the below-market offer price, reflecting a Japanese business culture that prioritizes stable ownership and amicable relations over immediate price gains.

What is the significance of the Toyota Industries buyout for Japan's corporate governance?

The Toyota Industries buyout is a critical test for Japan's corporate governance reforms, which aim to unwind cross-shareholdings and boost investor value, highlighting the tension between activist investing and traditional Japanese business practices.

Home / Business and Economy / Elliott Fights Lowball Toyota Industries Buyout Offer

Elliott Fights Lowball Toyota Industries Buyout Offer

4 Feb

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Summary

Elliott criticizes the Toyota group's buyout proposal as significantly undervalued.
Loyal Toyota shareholders are expected to tender shares at ¥18,800, below market.
The deal is a test of Japan's corporate governance reforms and shareholder value.

Elliott Fights Lowball Toyota Industries Buyout Offer

Elliott Investment Management is firmly resisting the Toyota group's proposed buyout of Toyota Industries, asserting that the offer of ¥18,800 per share "very significantly undervalues" the supplier. The tender period, closing on February 12, sees some Toyota affiliates and insurers, including Aioi Nissay Dowa, Mitsui Sumitomo, and Tokio Marine, intending to tender their shares at the below-market price. This loyalty reflects deeper Japanese business values prioritizing stable governance and amicable relations over purely price-driven decisions, posing a significant challenge for Elliott's activist campaign.

The ongoing standoff, with Toyota Industries shares trading above the ¥6.1 trillion buyout offer at ¥6.3 trillion, serves as a critical examination of Japan's corporate governance reforms. These reforms aim to dismantle complex cross-shareholdings and enhance investor value. For Elliott, which holds a 6.7% stake, the deal's structure means Toyota Industries' own valuable stakes in other companies could effectively render the buyout price as free. Elliott has proposed an alternative standalone plan aiming for a ¥40,000 per share valuation by 2028.