Elliott Opposes Toyota Fudosan's Revised Tender Offer for Toyota Industries Corporation

Core Viewpoint - Elliott opposes the revised tender offer (Revised TOB) by Toyota Fudosan at ¥18,800 per share, arguing it significantly undervalues Toyota Industries, with an intrinsic net asset value estimated at over ¥26,000 per share, nearly 40% higher than the Revised TOB price [1][3][10] Group 1: Valuation Analysis - The intrinsic net asset value (NAV) of Toyota Industries is projected to exceed ¥40,000 per share by 2028 through a Standalone Plan, which Elliott believes is a more favorable path than accepting the Revised TOB [1][10][20] - The Original TOB was initially set at ¥16,300 per share, which was also deemed significantly undervalued, with a NAV of ¥20,696 per share at that time [5][9] - Since the Original TOB announcement, the value of Toyota Industries' stakes in publicly traded companies has increased by over 40%, while the Revised TOB only reflects a ¥2,500 increase, failing to capture the full value appreciation [12][15] Group 2: Governance Concerns - Elliott highlights deficiencies in the transaction governance process, stating that the Revised TOB represents a setback for corporate governance reforms in Japan and could dampen investor interest in the market [2][6][27] - The Revised TOB is criticized for lacking true majority-of-minority protection, as only 42% of non-Toyota Group shareholders need to tender their shares, which is below a genuine majority threshold [20][21] - The financial advisors involved in the transaction are affiliated with entities that have conflicts of interest, raising concerns about the fairness of the offer [20][21] Group 3: Standalone Plan - The Standalone Plan for Toyota Industries is presented as a viable alternative to the Revised TOB, focusing on operational improvements, better capital allocation, and governance reforms to enhance shareholder value [19][21][24] - Key elements of the Standalone Plan include ceasing overinvestment in the automotive segment, capturing margin improvement opportunities, and unwinding cross-shareholdings outside the context of any tender offer [21][22] - Elliott believes that rejecting the Revised TOB and pursuing the Standalone Plan will maximize value for all stakeholders, demonstrating the effectiveness of Japan's governance reforms [8][24][27]