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Toyota Boosts Offer Amid Shareholder Row
3 Mar
Summary
- Toyota Industries' revised offer values the bid at $30 billion.
- Activist fund Elliott Investment Management accepted the higher offer.
- Concerns remain over fairness to minority shareholders.
Toyota Motor has substantially increased its acquisition offer for its group company, Toyota Industries (TICO), to $30 billion, or 20,600 yen per share. This second revised bid was sufficient to gain the support of activist investor Elliott Investment Management, which had previously deemed earlier offers too low.
The increased offer comes after months of pressure from Elliott and aims to allow TICO, a key supplier, to pursue advanced mobility technologies without short-term profit pressures. Despite the sweetened deal, governance concerns linger among some investors.
Minority shareholders initially protested the original offer of 16,300 yen per share, citing underpricing and a lack of transparency. While TICO has since provided more financial details and secured fairness opinions, critics like the Asian Corporate Governance Association and some overseas investors point to the classification of other Toyota group companies as independent minority shareholders as a point of contention.
Toyota Fudosan, the acquiring entity, defends these classifications, stating the group companies are independent. The deal requires acceptance from 42.01% of minority shareholders, excluding Toyota Motor's existing stake. The offer was set to conclude on March 16, and its outcome is seen as a significant test for corporate governance standards in Japan.
