Prime Highlight
- Toyota Motor increased its bid for Toyota Industries to 18,800 yen per share, addressing investor concerns and strengthening shareholder value.
- The buyout, supported by Toyota Industries, tightens the founding family’s controlwhile maintaining fairness and transparency in the deal.
Key Facts
- The revised offer raises Toyota’s total contribution to up to 800 billion yen, up from 706 billion yen, after advisory committee review and negotiations with Toyota Fudosan.
- The tender offer runs from January 15 to February 12, with Toyota Industries recommending shareholders tender their sharesin support of the deal.
Background
Toyota Motor has agreed to raise its offer for group company Toyota Industries by around 15%, increasing the bid to 18,800 yen per share, as it moves ahead with plans to take the forklift maker private.
The automaker had earlier offered 16,300 yen per share in June, but faced mounting criticism from overseas investors who said the price undervalued the company and lacked transparency. Toyota Industries shares closed at 18,025 yen on Wednesday, just below the new offer price.
The buyout will see Toyota Industries taken private by Toyota Motor, real estate arm Toyota Fudosan, and Toyota Chairman Akio Toyoda, tightening the founding family’s control over the group. The deal has drawn close attention because Japan is currently encouraging firms to unwind cross-shareholdings and improve corporate governance.
Pressure on Toyota increased after U.S. activist investor Elliott Investment Management revealed in November that it had taken a stake in Toyota Industries. Elliott later raised its holding to 5%, arguing that the original offer did not reflect the company’s true value.
In a filing, Toyota said it had agreed to lift its total contribution for the transaction to up to 800 billion yen, from an earlier 706 billion yen, after talks with Toyota Fudosan and reviewing feedback from an advisory committee. The committee said the revised terms did not favour any single party and did not unfairly benefit Toyoda or Toyota Fudosan.
Toyota added that negotiations with Toyota Fudosan took place without Toyoda’s involvement to ensure fairness.
In a separate statement, Toyota Industries said it supported the new offer and advised shareholders to tender their shares. The tender period will run from January 15 to February 12, according to group supplier Denso, which is also a shareholder in Toyota Industries.
The original offer had carried a premium of about 23% to the share price before news of the deal surfaced in April.