TLDR
- Toyota increased its Toyota Industries tender offer to ¥20,600 ($132) per share from the previous ¥18,800
- The revised buyout values Toyota Industries at approximately $40 billion
- Elliott Investment Management, which holds 7.1% of the company, accepted the enhanced terms
- The tender offer deadline extends through March 16
- Toyota Motor (TM) stock gained ground Monday following the announcement
Toyota Motor’s U.S.-traded shares climbed during early Monday trading after the company resolved a protracted dispute with activist investor Elliott Investment Management.
Toyota increased its acquisition price for Toyota Industries — the forklift manufacturer trading as TICO — to ¥20,600 ($132) per share. The company had previously offered ¥18,800 per share during January.
The enhanced valuation places the transaction at approximately $40 billion.
Elliott, currently controlling a 7.1% position in Toyota Industries, committed to tendering its shares at the updated price. The investment firm had been advocating for a higher valuation since disclosing an initial 3% stake in November.
Shareholders now have until March 16 to respond to the offer, representing a two-week extension.
A Long Road to a Deal
Toyota’s initial proposal, launched in June of last year, stood at ¥16,300 ($104) per share. Elliott characterized the bid as inadequate and argued Toyota Industries was undervalued by up to 38%.
When Toyota elevated the offer to ¥18,800 in January, Elliott rejected the terms again, describing them as significantly below fair value. The activist had suggested a reasonable price near ¥25,000 ($160) per share.
The latest ¥20,600 price remains below Elliott’s target. However, Elliott acknowledged it represents “an improved outcome” for minority shareholders and agreed to support the transaction.
Elliott initially accumulated its 5% stake at approximately ¥16,650 per share. At the ¥20,600 price point, the firm stands to realize roughly 24% gains on that investment.
While the final price falls short of Elliott’s desired valuation, the return is substantial — and the firm avoids protracted litigation.
The Offer Conditions
The enhanced proposal carries specific requirements. Toyota indicated the price adjustment depends on obtaining loan guarantees from its banking partners.
The acquisition is being pursued by a consortium featuring Toyota Motor, Toyota Chairman Akio Toyoda, and affiliated real estate company Toyota Fudosan.
The disclosure was published Monday, with the tender offer initially scheduled to close that day before the extension was granted.
Toyota Industries’ shares surged on the announcement. Toyota Motor’s U.S.-listed TM stock similarly moved higher during early Monday market activity.
Elliott’s acceptance of the offer eliminates the possibility of the activist pursuing legal challenges over the valuation — a prospect that had created uncertainty around the transaction.
The tender offer now closes March 16, providing shareholders adequate time to evaluate the ¥20,600 per share proposal.
