Elliott Investment Management on Friday announced it will not tender its holdings in Toyota Industries into the extended tender offer at the existing terms and strongly encouraged other investors to do the same. The firm also urged shareholders who have already tendered to withdraw their shares.
Elliott has positioned itself as the most outspoken opponent of a proposal by a group of Toyota Motor companies to take the forklift manufacturer private. The activist manager contends that the offer price does not adequately reflect the interests of minority shareholders.
The Toyota-led consortium initially proposed 16,300 yen per share before increasing the bid to 18,800 yen in January when it launched the formal tender offer, which was scheduled to close on Thursday. As of two and a half hours before that deadline - the close of trading on Thursday - the equivalent of 33.1% of shares had been tendered.
For the buyout attempt to succeed under the conditions set out, 42.01% of shareholders classified as minority owners must accept the offer. That threshold excludes Toyota Motor’s 24.66% stake in Toyota Industries.
Market reaction followed the disclosure that the tender period had been extended. Toyota Industries shares jumped after the extension was announced on Thursday and on Friday morning were trading at around a record high of 20,355 yen per share.
The dispute highlights a standoff between an activist shareholder arguing the bid undervalues the company and a buyer group seeking to complete a take-private transaction. At present, the level of tendered shares remains below the specified minority acceptance threshold required for the transaction to be approved under the stated terms.
Summary
Elliott declined to tender its Toyota Industries stock into the extended offer and urged other shareholders to withhold or withdraw tenders. The consortium raised its bid from 16,300 yen to 18,800 yen in January, and 33.1% of shares had been tendered shortly before the Thursday deadline, below the 42.01% minority acceptance requirement. Shares reached around 20,355 yen on Friday morning after the tender extension was disclosed.
Context and immediate implications
The situation leaves the outcome of the take-private effort uncertain while the tendered proportion of minority shares remains short of the target. The share-price response to the extension indicates investor attention and willingness to reprice the stock in reaction to developments tied to the offer.