Activist investor Elliott Investment Management has quietly built a significant stake of almost 5% in Toyota Industries Corp, joining a growing chorus of shareholders opposing the proposed JPY16,300-per-share ($30.5bn) buyout offer led by Akio Toyoda as too low, according to a report by Bloomberg.
The report cites Toyota Industries as confirming in a regulatory filing that Elliott held 3.26% of the company as of 30 September, but sources say that position has since increased. Elliott has reportedly told Toyota Industries’ management that the buyout price undervalues the company and suggested alternative deal structures.
The proposed deal – Japan’s largest-ever privatisation – would see a new holding company under Toyota Fudosan, a real estate arm controlled by the Toyoda family, take the manufacturer private. The offer was announced in June at an 11% discount to Toyota Industries’ market price at the time, prompting backlash from institutional investors.
Toyota Industries’ shares have since traded above the offer price, closing Tuesday at JP17,260, suggesting continued investor skepticism. Analysts estimate the firm’s fair value to be as high as JPY22,782 per share, reflecting rising valuations of its cross-shareholdings in other Toyota group companies.
The company said it continues to engage with shareholders, including Elliott, but declined to comment further. The tender offer is expected to launch next year and, if successful, would consolidate the Toyoda family’s control over Japan’s most powerful industrial group.
