The Toyota group extended the tender period for its bid to privatize a key unit, signaling the Japanese conglomerate needs more time to rally shareholder support in the face of an aggressive push by Elliott Investment Management to block the deal.
The new deadline is March 2, and the offer price remains unchanged, the group said in a filing. The offer period was previously slated to end Thursday.
The extension prolongs Toyota¡¯s high-profile standoff with Elliott, and means the activist fund still has a chance at derailing what it argues is an undervalued offer for Toyota Industries. While the extra time gives Toyota the opportunity to lobby more investors, it also leaves the door open for the stock to rise further above the offer price ¡ª potentially ramping up pressure for an even higher offer to get the proposal over the line.
Toyota¡¯s proposal was contentious from the start, with its initial offer of ?16,300 per share in June drawing rebukes from investors and analysts who viewed it as an attempt to get them to sell at an undervalued price. Under intensifying pressure from Elliott, the company sweetened the offer to ?18,800 per share ¡ª valuing Toyota Industries at ?6.1 trillion, but still below its market capitalization and doing little to appease wary investors.
Toyota Industries shares reversed losses to gain as much as 1.7% to ?20,000.
Under the plan, the Toyota group¡¯s privatization bid would cost it ?5.4 trillion, including ?4.3 trillion for the Toyota Industries buyout.
Elliott, the deal¡¯s most vocal critic, at one point suggested a standalone plan in which Toyota Industries could achieve a valuation of more than ?40,000 per share by 2028 by unwinding cross-shareholdings, consolidating, improving capital allocation and implementing governance reforms.
Toyota Industries is one of the world¡¯s largest makers of forklifts but was founded by Sakichi Toyoda to commercialize the automated looms he had invented. His son, Kiichiro, went on to create Toyota Motor ¡ª now the world¡¯s No. 1 carmaker. And Akio, Kiichiro¡¯s grandson, led the automaker as chief executive officer for 14 years until 2023, when he stepped aside to become chairman.
As Toyota grew, so did the complexity of the web of cross-shareholdings among group companies. The Japanese government has been pushing firms to unwind such arrangements, with the goal of improving corporate governance, enhancing transparency and boosting shareholder returns.
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