Elliott Rejects Toyota Industries' $39B Offer, Demands Higher Price

LONDON, UK – January 15, 2026 – Activist investor Elliott Investment Management has publicly rejected a revised ¥6.1 trillion ($39 billion) tender offer for Toyota Industries Corporation, setting the stage for a high-stakes battle over the company's true value. In a sharply worded statement, Elliott declared that the new offer price of ¥18,800 per share "continues to very substantially undervalue" the manufacturing and logistics giant.

The influential fund, which holds a significant 5% stake in Toyota Industries, argues that the company's fair value is more than ¥25,000 per share. Elliott has stated it will not tender its shares and will actively encourage other minority shareholders to oppose the deal, posing a significant threat to the transaction orchestrated by members of the wider Toyota Group, including Toyota Motor Corporation.

The Anatomy of the Offer

The tender offer is being fronted by Toyota Asset Preparatory Co., Ltd., an entity established by the unlisted real estate firm Toyota Fudosan, which is chaired by Toyota Motor's own chairman, Akio Toyoda. The plan, involving Toyota Motor and the founding family, aims to take Toyota Industries private. This move is positioned as a way to strengthen the family's control over the sprawling Toyota empire and resolve a "parent-child" listing structure—a corporate arrangement that has drawn increasing scrutiny from governance advocates in Japan.

The revised offer of ¥18,800 per share represents a 15% increase from the initial bid of ¥16,300 announced in June 2025. However, this concession has failed to appease Elliott and other market watchers. The tender offer period is set to run from January 16 to February 12, 2026. While the board of Toyota Industries has formally recommended that shareholders accept the offer, the market's reaction suggests a deep-seated belief that the price is still too low. On Thursday, shares in Toyota Industries surged past the offer price, trading as high as ¥19,255, a clear signal that investors are anticipating a sweeter deal.

Beyond Forklifts: Unlocking a Hidden Empire

At the heart of the dispute is the complex valuation of Toyota Industries, a company far more intricate than its public image as the world's largest forklift manufacturer suggests. While its core operations in materials handling, automotive components, and textile machinery are market-leading, a substantial portion of its value lies in a vast portfolio of financial assets.

Elliott's valuation hinges on these assets, particularly Toyota Industries' substantial cross-shareholdings in other publicly traded Toyota Group companies, most notably Toyota Motor Corporation itself. According to Elliott, these holdings have appreciated significantly, adding more than ¥5,000 per share to the company's intrinsic value since the initial offer was floated in June 2025. This increase reflects an approximately 40% surge in the value of its equity stakes in Toyota Motor and other affiliates.

"The higher offer is almost worse than the original given that Toyota Industries' group shareholdings are worth ¥5,300 per share more now than they were in June," noted one independent research analyst. This sentiment is echoed by other investors, including Hugh Sloane of UK-based fund Sloane Robinson, who independently supports a valuation of at least ¥25,000 per share. The consensus among critics is that the offer fails to reflect the soaring market value of these core holdings, effectively allowing the Toyota Group to acquire the company's valuable operating businesses and its equity portfolio at a steep discount.

A Test for Japanese Corporate Governance

Elliott's public challenge is unfolding against the backdrop of a profound transformation in Japan's corporate landscape. For years, the Tokyo Stock Exchange and the Financial Services Agency have pushed for sweeping governance reforms aimed at unwinding the nation's infamous cross-shareholding structures. These arrangements, where group companies hold stakes in one another, have long been criticized for insulating management from accountability, depressing capital efficiency, and creating conflicts of interest.

While the Toyota Industries deal is partly framed as a response to this pressure—aiming to dissolve a parent-child listing and untangle some cross-shareholdings—activists argue it falls short of the reforms' true spirit. Instead of unlocking value for all shareholders, they contend the offer prioritizes consolidating control for the founding family at the expense of minority investors. This situation has turned the deal into a litmus test for the effectiveness of Japan's governance reforms and the newfound power of shareholders.

Shareholder activism, once a rarity in Japan, has exploded in recent years. The number of activist campaigns surged by 156% in the first quarter of 2024, making Japan the second-most targeted market in the world after the United States. Foreign funds like Elliott, which has also launched campaigns at Sumitomo Realty and made a significant investment in SoftBank Group, have been at the forefront of this movement, demanding better returns, asset sales, and improved governance from some of the country's largest corporations.

The Path Forward

With a stated 5% stake and a clear intention to rally other investors, Elliott's opposition presents a formidable obstacle. The fund's statement that it "does not intend to tender its shares under the current transaction terms" is an unambiguous challenge to the offerors. The support from other investors like Sloane Robinson reinforces the narrative that a significant bloc of minority shareholders is prepared to fight for a better price.

This standoff leaves the Toyota bidding consortium with several difficult choices. It could raise the offer for a second time to meet the activists' demands, a move that would vindicate their campaign. Alternatively, it could proceed with the current offer and risk failing to secure the necessary threshold of shares to complete the privatization, which would be a significant public setback. The outcome of this contest will be watched closely across global financial markets, as it could set a powerful precedent for future M&A transactions and the balance of power between management and shareholders in corporate Japan.