TOKYO, Jan 14 (Reuters) – Toyota Motor said on Wednesday it had agreed to raise its offer for group firm Toyota Industries to 18,800 yen ($118.11) per share as part of the plan to take the forklift maker private.
The Japanese automotive giant had previously offered 16,300 yen per share in a deal announced in June.
The transaction is being closely watched by global investors as it coincides with Japan’s push to unwind cross-shareholdings and bolster corporate governance standards.
Toyota Industries, which also supplies engines to Toyota Motor, is slated to be taken private by the automaker, group real estate company Toyota Fudosan and Toyota Chairman Akio Toyoda, strengthening the founding family’s grip on the group.
TOYOTA INDUSTRIES BACKS TENDER OFFER
Some global investors have criticised Toyota for an “opaque” valuation of the buyout and a failure to safeguard the interests of minority shareholders.
The criticism intensified after U.S. activist investor Elliott Investment Management disclosed in November that it had taken a stake in Toyota Industries, saying the original offer undervalued the business and lacked transparency.
Elliott said last month it had further ramped up its stake in Toyota Industries to 5%, adding pressure on Toyota to improve the terms of the deal.
Shares in Toyota Industries closed at 18,025 yen on Wednesday, around 4% below the increased offer price.
Toyota said in a filing on Wednesday it had agreed to raise its contribution for the transaction to up to 800 billion yen from 706 billion yen following talks with Toyota Fudosan and considering opinions of an advisory committee on the deal.
The increased price reflected changes in the economic and Toyota Industries’ business environment, Kenta Kon, a director at Toyota Fudosan, who is also the automaker’s chief financial officer, said during an online briefing.
Toyota Industries said in a separate filing it supported the tender offer and recommended that its shareholders tender their shares in response to it.
Toyota’s advisory committee told the automaker that the revised terms, including the higher price, did not benefit any specific party and did not unfairly advantage Toyoda or Toyota Fudosan at the company’s expense, Toyota’s filing showed.
Negotiations between the automaker and Toyota Fudosan were conducted without Toyoda’s involvement to ensure fairness, it added. Toyoda’s investment in the deal remained unchanged at the 1 billion yen committed in June.
While Toyota in the past might not have been able to make an investment of this size for its group, it has enough financial strength that allows it to do so without any funding concerns now, Masahiro Yamamoto, chief officer of Toyota’s accounting group, told the briefing.
The tender offer will run from January 15 to February 12, major Toyota supplier and Toyota Industries shareholder Denso said in a separate filing.
($1 = 159.1800 yen)
(Reporting by Daniel Leussink and Anton Bridge. Editing by Jacqueline Wong, Alexandra Hudson and Mark Potter)
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