Toyota's plan to take its affiliate Toyota Industries private has ignited a clash with activist investors. The initial bid announced in June was sweetened this month by 15% to ¥18,800 per share, but U.S.-based Elliott Investment Management criticizes it as undervaluing the company significantly.
Toyota's bid to privatize its affiliate Toyota Industries, known as TICO, started as an unremarkable deal but has evolved into a battleground between activist investors pushing for maximum shareholder value and Japan's corporate culture that emphasizes stakeholder harmony over returns.
In June, Toyota launched an initial offer of ¥16,300 per share. Leading the opposition, U.S.-based Elliott Investment Management, which owns 6.7% of TICO, has demanded a higher price. This month, Toyota raised the bid by 15% to ¥18,800 per share, valuing the deal at around $27.8 billion, yet Elliott argues this undervalues TICO by nearly 40%—or more as a standalone entity.
Elliott has slammed the offer as opaque and failing basic governance standards. This dispute serves as a test case for dealmaking in Japan, highlighting tensions between traditional practices and global activist pressures. Since the announcement, Elliott has spearheaded the campaign for better terms.
