Toyota Industries Buyout Bid Dips 16% Below Its Stock Holdings

Toyota group’s proposed ¥4.7 trillion offer to privatize a forklift maker has prompted one of the world’s most tenacious activist funds to call it a lowball offer. A closer look at the target’s shareholdings helps explain why.

The buyout target, Toyota Industries Corp., owns shares valued at ¥5.6 trillion, just shy of the company’s own market value, according to data compiled by Bloomberg. That makes the June buyout offer nearly ¥1 trillion, or 16%, below the value of those shareholdings.

Toyota Industries was founded nearly a century ago as a loom maker by the great-grandfather of Toyota Motor Corp.’s current chairman, who heads the real estate firm leading the buyout. Besides the historical significance of Toyota Industries, the bulk of its holdings are those of other group firms, making Toyota Industries a strategic company.

What’s more, Toyota Industries had ¥506 billion in cash, equivalents and short-term investments at the end of September, according to data compiled by Bloomberg.

The gap between the take-private proposal and the value of Toyota Industries’ holdings has become a major sticking point for activist fund Elliott Investment Management, which has built a 5% stake in the company, and is said to have been talking to Japanese funds to gain support for its campaign against the buyout offer.

The offer price “is a matter of discussion and agreement between Toyota Fudosan and Toyota Industries Corporation," a Toyota Motor spokesperson told Bloomberg. Toyota Industries said it maintains constructive discussions with all its shareholders but declined to comment on the actions of any specific investor. Toyota Fudosan wasn’t immediately reachable.

It’s common in Japan for publicly traded companies to hold stakes in each other, partly to cement business ties. The market value of Toyota Industries’ largest 10 cross-shareholdings has gone up more than 20% since the take-private offer was announced.

A group led by Toyoda announced plans in June to privatize Toyota Industries, once a maker of textile looms that gave birth to what is now the world’s biggest carmaker. The proposal included a tender offer of ¥16,300 for each share of Toyota Industries, or an 11% discount to the company’s closing price on the day it was announced.

Toyota Industries shares closed trading on Thursday at ¥17,725, up 38% for the year.

A group of investors, in a letter submitted in August to the boards of Toyota Motor and Toyota Industries, called for more transparency in how the group arrived at that valuation.

“Central to our concerns is the lack of full valuation disclosure," the group said, citing numerous issues including limited price negotiations, no exclusion of conflicted parties in the minority vote and an opaque valuation methodology with no disclosures around financial projections, among others.

A special-purpose company will be created to private Toyota Industries, which in turn will mostly be owned by Toyota Fudosan Co., an unlisted real estate firm chaired by Toyoda. The founding family’s scion will also personally invest ¥1 billion in the new entity.

The takeover bid had been scheduled to start in December, but it was postponed until at least February after the approval process was delayed by antitrust regulators in various countries.

©2025 Bloomberg L.P.

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