Toyota Motor’s tender offer for Toyota Industries has been extended until March 2 after falling short of the necessary shareholder votes.
The extension comes amid stiff opposition from activist shareholder Elliott Investment, which has built a 7.1 per cent stake in Toyota Industries, making it the largest minority shareholder.
The extension sparked speculation that Toyota may increase the offer price again, boosting Toyota Industries’ shares to a record high.
As of Thursday, 99 million shares had been tendered, representing 33.1 per cent ownership, falling short of the 42.01 per cent threshold needed for a successful bid excluding Toyota Motor’s 24.66 per cent stake.
Christopher Richter, an analyst at CLSA, speculated that Toyota may need to raise the offer price further to secure the necessary votes.
A successful buyout would allow Toyota Motor Chairman Akio Toyoda to strengthen his influence over Toyota Industries, a key affiliate.
The deal has raised concerns about corporate governance, particularly after Elliott and other investors questioned the bid’s fairness.
Elliott argues that the company is worth 26,134 yen per share, while Toyota’s offer of 18,800 yen per share values the company at $36 billion.
Toyota has defended the offer as a premium to historical market prices, asserting that it reflects the company’s intrinsic value.
The bid, which was hiked 15 per cent last month, also faces criticism over the classification of Denso, Aisin, and Toyota Tsusho as independent shareholders, despite owning a combined 12.21 per cent in Toyota Industries.
Critics argue this lowers the independent threshold for a potential squeeze-out of minority shareholders.
Toyota Industries’ shares ended at 19,985 yen, up 1.6 per cent on the day and significantly higher than the 19,400 yen level before the extension was announced.
