The Toyota group sweetened a bid to privatize a key unit on the eve of its tender period, but that¡¯s unlikely to placate investors who say the new price still undervalues the company with the shares already outpacing the revised offer.
Bending to pressure from a vocal contingent of minority shareholders in Toyota Industries, the parent group backtracked on previous statements about standing firm and raised its ante to ?18,800 per share ($118.56), a 15% increase. But the stock rose as much as 5.9% to ?19,095, soon after the start of trading in Tokyo on Thursday.
That suggests that, far from easing the path to a deal, investors will demand an ever-higher premium in line with their lofty valuations. Hugh Sloane of U.K.-based fund Sloane Robinson, which owns stock in Toyota Industries, argues the company is worth at least ?25,000 per share. With global activists, including Elliott Investment Management, having openly challenged the offer, the outcome could shape future buyouts across corporate Japan.
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