Elliott Investment Management opposes a proposed ?6.1 trillion ($39 billion) privatization of Toyota Industries, urging other minority shareholders to resist the bid and arguing it could achieve greater value on its own.
The company has an intrinsic net asset value of ?26,000 per share, the U.S. activist fund said in a letter published Monday. That¡¯s much higher than the Toyota group¡¯s higher revised offer of ?18,800 per share, which failed to stifle the debate over Toyota Industries¡¯ valuation even after its tender period began last week.
As Elliott escalates its campaign to push Japan¡¯s largest business group for a sweeter deal, the standoff puts a spotlight on whether take-private deals by founding families offer fair value to minority shareholders. The outcome could shape how aggressively investors push back against similar transactions going forward.
In the letter, the fund suggested a ¡°standalone plan¡± in which Toyota Industries could achieve a valuation of more than ?40,000 per share by 2028 by unwinding cross-held shareholdings, consolidating, improving capital allocation and implementing governance reforms.
Elliott, which revealed in November that it had built a 5% stake in Toyota Industries, repeated its statement from last week that it won¡¯t tender its shares in the company, right after the Toyota group raised its offer price on the eve of its tender period.
¡°With a clear path to unlocking value as a standalone company through operational improvements and more efficient capital allocation, there is no imperative to proceed with this transaction,¡± Elliott wrote in the letter.
The tender period began Thursday and will run through Feb. 12. If successful, the company will fall under the control of an unlisted real estate company called Toyota Fudosan, which is chaired by Akio Toyoda, who also leads the board of Toyota Motor and is the grandson of the carmaker¡¯s founder.
When the Toyota group announced its take-private bid last June, its offer translated into a transaction valued at around ?4.7 trillion, an 11% discount to its market capitalization. Some investors called for more transparency in a deal that would strengthen the founding family¡¯s influence over Japan¡¯s largest business group, and rank among the largest acquisitions on record anywhere.
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