TLDR
- Toyota increased its bid for Toyota Industries to ¥20,600 ($132) per share from the previous ¥18,800 offer
- The revised acquisition values Toyota Industries at approximately $40 billion
- Elliott Investment Management, which owns 7.1% of the company, has accepted the improved terms
- Shareholders now have until March 16 to participate in the tender offer
- Toyota Motor (TM) shares gained ground on Monday after the announcement
Shares of Toyota Motor trading in the U.S. climbed during early Monday sessions after the automaker resolved a protracted dispute with activist investor Elliott Investment Management.
The Japanese automotive giant boosted its acquisition bid for Toyota Industries — the industrial equipment manufacturer trading as TICO — to ¥20,600 ($132) per share, representing a significant increase from the January proposal of ¥18,800.
With the enhanced pricing, the transaction now carries an estimated value of $40 billion.
Elliott, currently controlling 7.1% of Toyota Industries’ shares, has committed to accepting the revised terms. The activist investor had been advocating for higher compensation since disclosing an initial 3% position in November.
The acceptance window for shareholders has been pushed back by two weeks, now closing on March 16.
A Long Road to a Deal
Toyota’s initial proposal, announced last June, came in at ¥16,300 ($104) per share. Elliott characterized the bid as inadequate, claiming Toyota Industries was undervalued by up to 38%.
Following Toyota’s January revision to ¥18,800, Elliott maintained its opposition, stating the offer “very substantially undervalues” the subsidiary. The investment firm had suggested a fair valuation closer to ¥25,000 ($160) per share.
While the latest ¥20,600 offer remains below Elliott’s target, the firm described it as “an improved outcome” for minority investors and signaled its willingness to proceed.
Elliott initially accumulated its 5% holding at approximately ¥16,650 per share. With the current ¥20,600 valuation, the investment firm stands to realize around 24% gains on its position.
Though falling short of Elliott’s ideal outcome, the return represents a tangible profit — and allows the firm to exit without litigation.
The Offer Conditions
The enhanced bid includes certain prerequisites. Toyota indicated the higher price point requires securing financing guarantees from its banking partners.
The acquisition is being orchestrated by a group comprising Toyota Motor, Chairman Akio Toyoda, and the conglomerate’s property division, Toyota Fudosan.
The disclosure was made public on Monday, coinciding with what had been the original closing date before the extension was granted.
Shares of Toyota Industries surged following the announcement. Toyota Motor’s U.S.-traded TM stock similarly experienced upward momentum in Monday’s early trading.
Elliott’s decision to support the offer eliminates the possibility of legal challenges regarding valuation — a prospect that had created uncertainty around the transaction.
With the tender deadline now set for March 16, investors have additional time to evaluate whether the ¥20,600 per share price meets their expectations.
