Elliott Rejects Toyota's Revised Bid for Industries Unit

Elliott Opposes Toyota's Sweetened Offer

Elliott Investment Management has formally announced it will not accept the revised tender offer from Toyota Motor (TYO:7203) for the acquisition of forklift manufacturer Toyota Industries (TYO:6201). The investment firm argues the offer remains insufficient.

Overview of the Situation

Toyota Motor increased its initial bid to a tender offer price of 18,800 yen, equivalent to $118.55, per share. Despite the higher price, Elliott stated that the offer continues to 'very substantially undervalue Toyota Industries.' The activist investor believes the fair value of Toyota Industries' stock exceeds 25,000 yen per share, highlighting a significant valuation gap between the two parties.

Impact on the Market

This public rejection by a major shareholder puts pressure on Toyota Motor to reconsider its offer once again. The development introduces uncertainty into the acquisition process and may lead to a prolonged negotiation period. The stock prices of both Toyota Motor and Toyota Industries will be closely watched by investors for reactions to this standoff and any subsequent announcements.

Summary and Outlook

The acquisition now hinges on Toyota Motor's response to Elliott's firm stance. The automaker must decide whether to raise its bid to meet shareholder expectations or risk the deal falling through. Market participants will be monitoring for further negotiations or a potential stalemate between the corporation and the activist investor.

FAQ

Q: Why did Elliott reject Toyota's offer?
A: Elliott believes the offer of 18,800 yen per share substantially undervalues Toyota Industries, which it estimates is worth more than 25,000 yen per share.

Q: What was Toyota's revised offer for Toyota Industries?
A: The revised tender offer was 18,800 yen ($118.55) per share.

Q: What are the potential next steps in this acquisition attempt?
A: Toyota Motor may need to present a higher offer to gain approval from key shareholders like Elliott, or the deal could face significant delays and uncertainty.

Source: Investing.com