Toyota Sweetens $35 Billion Buyout Bid After Activist Pressure

Activist Victory Forces Toyota's Hand

Toyota Motor just delivered a rare victory for shareholder activism in Japan, raising its buyout offer for Toyota Industries by 15% to over $35 billion after months of pressure from Elliott Investment Management. The revised bid reached 18,800 yen per share, valuing Toyota Industries at roughly 5.6 trillion yen ($35 billion) , marking a significant increase from the earlier 16,300 yen per share offer made last June .

Shares of Toyota Industries jumped nearly 6% to 19,080 yen, soaring past the revised offer price , suggesting investors believe even the sweetened deal may not be enough. The revised bid marks a rare win for shareholder activism in Japan, where Elliott had publicly criticised the initial proposal as undervaluing the company .

Elliott Investment Management, which disclosed a stake in Toyota Industries in November and raised its holding to 5% last month, said it would not be tendering its shares under the improved terms and would be encouraging other shareholders to follow its lead . The activist investor has called the deal "very substantially" undervalued .

Complex Corporate Family Drama

This isn't just any corporate buyout. Toyota Industries, which founded Toyota Motor, produces a range of products including forklifts, engines, electronic components, and stamping dies . The company is set to be taken private through a special-purpose vehicle controlled primarily by Toyota Fudosan, an unlisted real estate company chaired by Toyota Motor chairman Akio Toyoda , strengthening the founding family's control over Japan's largest automaker.

Toyota initially proposed an offer price of 16,300 yen for the buyout, which was widely criticised by global investors for what they called an opaque valuation . Toyota Chairman Akio Toyoda had indicated in April 2025 that the founder's family was proposing to acquire Toyota Industries for a consideration of $42 billion, making the final deal meaningfully lower than the targeted valuation .

The tender opened Thursday and runs until February 12 , giving investors time to decide whether to accept the offer or hold out for potentially better terms.

Challenging Times for Toyota

The buyout drama unfolds as Toyota faces operational headwinds. Global output slid 5.5% to 821,723 units in November, marking the first year-on-year decline in six months, while global sales also fell 2.2% year-on-year . The company reported that sales in China fell after the country scaled back on purchase subsidies in certain regions .

The automaker flagged a substantial hit from U.S. tariffs, projecting a 1.45 trillion yen (over $9 billion) impact for its financial year ending March . Despite these challenges, Toyota announced it would invest $912 million across U.S. manufacturing facilities in five Southern states, part of a broader plan to spend up to $10 billion in the U.S.

Market Expects Higher Bids

Some analysts question the logic behind the higher offer, with one expert suggesting that if Toyota believes 18,800 reflects higher market prices, it implies they've downgraded their value of the underlying business . Investors may wait until late in the tender period to see if Toyota sweetens the terms again .

Independent analyst Travis Lundy expects "some interesting fireworks on this deal," calling it "the biggest mis-priced takeover in Japan for quite a while" and predicting activists will demand a higher price or try to block the deal . The fact that shares are trading above the offer price suggests the market agrees the company deserves more.

This battle represents a pivotal moment for corporate governance in Japan, where activist investors have historically struggled to influence major deals. Whether Toyota will need to raise its bid again depends largely on how many shareholders follow Elliott's lead in rejecting the current terms.