The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Hudson Lockett
HONG KONG, Jan 14 (Reuters Breakingviews) - It has taken Akio Toyoda and his fellow Toyota group insiders six months to acknowledge they were grossly undervaluing Toyota Industries 6201.T. In June the chair of Toyota Motor 7203.T – and effective head of the family’s sprawling corporate empire – was part of a consortium that offered $33 billion for the forklift-maker and car-parts supplier. On Wednesday he, Toyota Motor and unlisted real-estate firm Toyota Fudosan finally bumped up their proposal by 15%. Yet all it does is change the offer from derisory to just mean.
The increase to 18,000 yen per share from 16,300 yen merely covers the rally in the stocks Industries owns of other listed Toyota companies – Toyota Motor, Toyota Tsusho 8015.T, Aisin 7259.T and Denso 6902.T. These have jumped by an average of 54% since Toyoda and team unveiled their buyout. With their tender offer launching on Thursday, not letting some of that juice flow to outside shareholders would have looked egregiously greedy.
As it is, the higher offer only reduces the scale by which the consortium is undervaluing its target to 39%. That’s roughly where it stood at the start of the process. Add on some smaller holdings as well as the worth of the core business, using the almost 15 times price-to earnings multiple of German rival Kion KGX.DE, and Industries’ sum of the parts comes to around 26,000 yen a share.
There’s another new wrinkle: the target’s board on Wednesday finally recommended the offer to shareholders, having previously stayed effectively neutral. That may be enough to sway those non-Toyota group investors, who tend to back incumbent management and directors in Japan.
Toyoda and his partners need to secure 67% of Industries over the month-long tender to be able to squeeze out minority investors. At present they control, through Toyota group holdings, some 42%. Leading the pushback is Elliott Investment Management, which built a 5% stake in the last few months of 2025. If the activist fund can convince enough shareholders that the bidders are vulnerable, Industries may yet be bought at something closer to fair value.
Follow Hudson Lockett on Bluesky and X.
CONTEXT NEWS
A consortium led by Toyota Motor on January 14 said it would raise its offer for group firm Toyota Industries to 18,800 yen ($118.51) per share as part of a plan to take the forklift maker private. The new bid reflects an increase of 2,500 yen from an initial offer in June.
Activist firm Elliott Investment Management had built a stake of about 5% in Industries as of November and has argued the original bid “significantly undervalues” the target.
Group stocks held by Toyota Industries have rallied https://www.reuters.com/graphics/BRV-BRV/movabqawqpa/chart.png
(Editing by Antony Currie; Production by Shrabani Chakraborty)
((For previous columns by the author, Reuters customers can click on LOCKETT/ hudson.lockett@thomsonreuters.com))
