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4/29/2029

Shareholder Activism in Asia Drives Global Total to Record High

Nikkei Asia (04/29/29) Shikata, Masayuki

Activist shareholders had their busiest year on record in 2024, with the Asia-Pacific region making up a fifth of campaigns worldwide, pushing some companies higher in the stock market and spurring others to consider going private. The worldwide tally of activist campaigns rose by six to 258, up by half from three years earlier, according to data from financial advisory Lazard. Campaigns in the Asia-Pacific tripled over that period to 57, growing about 30% on the year. Japan accounted for more than 60% of the regional total with 37, an all-time high. Activity is picking up this year as well in the run-up to general shareholders meetings in June. South Korea saw 14 campaigns, a jump of 10 from 2023. Critics say South Korean conglomerates are often controlled by minority investors that care too little about other shareholders. Australia and Hong Kong saw increases of one activist campaign each. North America made up half the global total, down from 60% in 2022 and 85% in 2014. Europe had 62 campaigns last year. The upswing in Japan has been fueled by the push for corporate governance reform since 2013 and the Tokyo Stock Exchange's 2023 call for companies to be more mindful of their share prices. The bourse has encouraged corporations to focus less on share buybacks and dividends than on steps for long-term growth, such as capital spending and the sale of unprofitable businesses. Demands for capital allocation to improve return on investment accounted for 51% of activist activity in Japan last year, significantly higher than the five-year average of 32%. U.S.-based Dalton Investments called on Japanese snack maker Ezaki Glico (2206) to amend its articles of incorporation to allow shareholder returns to be decided by investors as well, not just the board of directors. Though the proposal was rejected, it won more than 40% support, and Glico itself put forward a similar measure that was approved at the following general shareholders meeting in March. U.K.-based Palliser Capital took a stake last year in developer Tokyo Tatemono (8804) and argued that more efficient use of its capital, such as selling a cross-held stake in peer Hulic, would boost corporate value. Activist investors are increasingly seeking to lock in unrealized gains from rising land prices, reaping quick profits from property sales that can go toward dividends. Companies in the Tokyo Stock Exchange's broad Topix index had 25.88 trillion yen ($181 billion at current rates) in unrealized gains on property holdings at the end of March 2024, up about 20% from four years earlier. After buying into Mitsui Fudosan (8801) in 2024, U.S.-based Elliott Investment Management this year took a stake in Sumitomo Realty & Development (8830) and is expected to push for the developer to sell real estate holdings. This month, Dalton sent a letter to Fuji Media Holdings (4676), parent of Fuji Television, calling for it to spin off its real estate business and replace its board of directors. Activist campaigns have sparked share price rallies at some companies. Shares of elevator maker Fujitec (6406) were up roughly 80% from March 2023, when it dismissed Takakazu Uchiyama -- a member of the founding family -- as chairman under pressure from Oasis Management. The rise in demands from activists "creates a sense of tension among management, including at companies that don't receive such proposals," said Masatoshi Kikuchi, chief equity strategist at Mizuho Securities. Previously tight cross-shareholdings are being unwound, and reasonable proposals from minority investors are more likely to garner support from foreign shareholders. Some companies are going private to shield themselves from perceived pressure. Investments by buyout funds targeting mature companies in the Asia-Pacific were the highest in three years in 2024, according to Deloitte Touche Tohmatsu. Toyota Industries (6201) is considering going this route after facing pressure from investment funds last year to take steps such as dissolving a parent-child listing with a subsidiary and buying back more shares. Toyota Industries holds a 9% stake in Toyota Motor (7203). The automaker "may have proposed having [Toyota Industries] go private as a precautionary measure," said a source at an investment bank.

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1/16/2027

Dealmakers See More Retail Mergers and IPOs in 2026 After Tariffs Sidelined M&A Last Year

Reuters (01/16/27) Summerville, Abigail

Dealmakers predict an uptick in mergers and IPOs for retailers and consumer goods companies this year after punishing tariffs on imports to the United States had sidelined activity in the industry for the first half of 2025. Several national restaurant and convenience store chains are primed for IPOs, along with organic baby food company Once Upon a Farm, Hellman & Friedman-backed auto repair company Caliber Holdings, and Bob’s Discount Furniture, which is owned by Bain Capital, according to more than two dozen CEOs, M&A advisors and private equity investors who attended the ICR Conference in Orlando, Florida this week. “The number of high-quality companies that are in queue to go public in 2026 is higher than we’ve seen since 2021,” Ben Frost, Goldman Sachs' (GS) global co-head of the consumer retail group said in an interview. “The question is does that mean more will go public? If it does, private investors will see the ability to exit investments again (in a) regular way, which will help (private equity) activity.” Frost was one of the more than 3,000 attendees at the annual gathering, where executives from Walmart (WMT.O), Shake Shack (SHAK.N), and Jersey Mike’s were among presenters while bankers, lawyers and private equity investors spent much of their time brokering deals and landing clients behind the scenes. The upbeat mood was a marked shift from last spring after U.S. President Donald Trump's "Liberation Day" tariff announcements sent markets skidding and killed or stalled several consumer and retail deals. The second half of the year saw a resurgence in activity that brought with it several mega deals, including Kimberly-Clark’s (KMB.O) nearly $50 billion deal to buy Kenvue (KVUE.N), announced in November. "(Companies) are still really focused on growth and synergies. They’re looking at bigger deals than they’ve been willing to do for the last number of years. The back half of last year was the start of that,” Frost said. Kraft Heinz (KHC.O) announced in September it would split into two companies to unwind its 2015 merger, shortly after Keurig Dr Pepper (KDP.O) had agreed to buy JDE Peet’s for $18 billion with plans to split the coffee and non-coffee beverages into separate companies. In apparel, Gildan Activewear (GIL) bought Hanesbrands for $2.2 billion. Investors could also spur more deals and corporate breakups in the sectors, Audra Cohen, co-head of the consumer and retail group at law firm Sullivan & Cromwell, said in an interview at the conference. Corporate agitators have taken recent stakes in Lululemon Athletica (LULU.O) and Target (TGT.N), but aren't yet pushing for M&A. Lululemon hosted a morning yoga class and its management team met with analysts and investors at the conference. Meanwhile, private equity buyers are beating out companies for some deals, Manna Tree Partners co-founder Ellie Rubenstein told Reuters. Her firm sold its cottage cheese brand Good Culture to a larger consumer-focused firm L Catterton just last week. “A lot of these brands have gotten lost (inside big corporations) and the consumers don’t like it. You may see a lot of corporate carveouts this year,” Rubenstein told Reuters in an interview after her keynote address. She interviewed her billionaire father and Carlyle co-founder David Rubenstein, 76, on stage at the conference. The father-daughter pair contrasted their portfolios, pointing to Carlyle’s history of investing in fast food chains like McDonald's (MCD.N) and KFC Korea while Manna Tree saw big returns from investments in healthier food brands like pasture-raised egg producer Vital Farms (VITL.O) and Good Culture.

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3/9/2026

Activist Threat Pushes Japanese Companies to Unwind Cross-shareholdings

Reuters (03/09/26) Nussey, Sam; Uranaka, Miho

Pressure from activists, or the fear of being engaged by them, is pushing Japanese companies to accelerate governance reforms by unwinding the cross-shareholdings that have underpinned relationships for decades. Major firms including Toyota Motor (7203.T) and Nintendo (7974.T) have moved to unwind cross-shareholdings, Reuters has reported, with the "Super Mario" maker later announcing a sale. The practice of companies owning stakes in each other is unusual in the West but common in Japan where it provides management with a buffer of stable, supportive investors. Critics say the practice reduces transparency, muddies valuations and insulates management from the voices of shareholders. As regulators and the Tokyo bourse push firms to dissolve cross-shareholdings, companies seen as laggards risk being engaged by activists. Five years ago Japanese companies would ignore activists, said Pella Funds Chief Investment Officer Jordan Cvetanovski. "Today, however, it feels as though companies have all read the same memo - they understand what they need to do and they are doing it," Cvetanovski said. "I have never seen such a rapid shift in mindset across an entire market." Demonstrating the rise of activists, Elliott Investment Management scored a landmark win this month, forcing Toyota to sweeten its bid for Toyota Industries (6201.T) amid criticism over transparency and fairness to minority shareholders. Toyota plans to engineer the sale of some $19 billion of its shares by banks and insurers in a demonstration of its seriousness about governance, Reuters has reported. The large scale move from such a prominent firm could prompt others to follow suit, analysts said. "Anybody who has had an activist in the house wants to look better," said Nicholas Benes, founder of the Board Director Training Institute of Japan and a proponent of Japan's corporate governance drive. The country saw a record number of activist campaigns last year, according to Jefferies, while the unwinding of cross-shareholdings is gaining momentum. Companies announcing the sale of their shares by other companies include electronics manufacturer Ibiden (4062.T) and frozen food firm Nichirei (2871.T). Kansai Electric Power (9503.T), engaged by Elliott, is considering selling shares of construction firm Kinden (1944.T), said a person familiar with the matter. "The activists are great but they're not the ones driving this, they're in the sidecar - the fuse on the governance revolution was lit by Abe," said CLSA Securities strategist Nicholas Smith, referring to former Prime Minister Shinzo Abe. The government of Prime Minister Sanae Takaichi, widely seen as an Abe acolyte and who won a sweeping election victory last month, will put pressure firms to put cash piles to work in hiking wages and investing in their businesses, Smith said. Nintendo late last month announced the $1.9 billion sale of its shares by banks including Kyoto Financial (5844.T), as well as a stock buy-back scheme. Kyoto Financial has held shares in Nintendo since the 1960s. Nintendo approached Kyoto Financial about the sale, said Hideki Onishi, general manager at the bank's corporate planning division. Kyoto Financial has a policy of cutting cross-shareholdings by more than 100 billion yen ($630 million) by March-end 2029 and, with requests from the market, has somewhat accelerated the pace, Onishi said in an interview. The bank plans to present its future policy for reducing cross-shareholdings in its next mid-term plan which will start from April, Onishi said. While cross-shareholdings have offered mutual support in business ties, they have also served as a defensive measure for management against takeover bids. "Using the stable shareholder structure as a shield - as seen five or six years ago or in the 2000s - and fighting to the bitter end is becoming harder," said Yasuhiro Kikuchi, head of the shareholder and capital strategy advisory department at Mizuho Securities. Meanwhile, companies will continue to be under pressure to improve near-term shareholder returns while the government also aims to ensure focus on medium- to long-term growth strategies. "With heartfelt respect, activists are the garbage collectors - they eject bad managers and bad practices, doing the heavy lifting while the ministries are supporting and directing to get the job done," said CLSA's Smith.

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3/9/2026

Opinion: Homes.com, Zillow and the Affordability Stakes of Who Controls the Listing Marketplace

HousingWire (03/09/26) Whitley, Jared

Jared Whitley, Housingwire contributor, says, "President Trump has made housing affordability the centerpiece of his domestic economic agenda, and for good reason. After four years of Biden-era inflation that priced millions of young families out of the market, the President highlighted declining mortgage costs in his 2026 State of the Union. He signed an executive order to stop large institutional investors from buying single-family homes that belong in the hands of American families. He directed Fannie Mae (OTCMKTS: FNMA) and Freddie Mac (OTCMKTS: FMCC) to purchase $200 billion in mortgage-backed securities to drive down borrowing costs. The message from this White House is unambiguous: restoring the American Dream of homeownership is a top priority, and Washington is finally doing something about it. So why are two Wall Street hedge funds trying to shut down a company that is building more competition, more transparency and more options for the very homebuyers the President is fighting for? CoStar Group (NASDAQ: CSGP), the dominant provider of commercial real estate data, has spent the last several years building Homes.com into a legitimate challenger to Zillow’s (NASDAQ: Z) near-monopoly in residential real estate listings. The business model difference matters directly to housing costs. Zillow monetizes consumer inquiries by routing them away from listing agents and toward paying “Premier Agents” who bid for lead placement, or by collecting referral fees of up to 40% of the agent’s commission when a transaction closes. Those costs do not vanish. They get passed through to buyers and sellers in the form of higher commissions and less flexible pricing, making an already unaffordable market even worse. Homes.com operates on a fundamentally different model. Its “Your Listing, Your Lead” approach connects buyers directly with the listing agent, whether or not that agent pays Homes.com anything. That creates real downward pressure on agent costs across the market. It is exactly the kind of pro-consumer, pro-competition innovation that free enterprise is supposed to produce. Now Third Point and D.E. Shaw, two hedge funds that each hold roughly 2% of CoStar’s outstanding shares, have publicly demanded the company abandon Homes.com entirely, replace its founder-CEO, and restructure on their timeline. Strip away the financial jargon and what they want is simple: CoStar should exit residential real estate so these funds can harvest a short-term stock price bump. The result would be one fewer competitor in a market where the FTC has found that roughly 85% of internet listing revenue is already concentrated among a handful of players and where the government has sued Zillow for paying a competitor to exit the market. Forcing Homes.com out through shareholder pressure would accomplish the same reduction in competition, just through a different door. Anyone tempted to trust these firms’ judgment should look at their records. At Advance Auto Parts (NYSE: AAP), Third Point secured three board seats in 2024 with no disclosed operational plan, then bailed out six months later after the stock fell nearly 50%. At Sony (NYSE: SONY), Third Point demanded a spinoff of the semiconductor division. Management had the backbone to refuse. That business achieved nearly 12% annual revenue growth, and Sony outperformed the S&P 500 by over 53 percentage points by the time Third Point walked away. D.E. Shaw pushed FIS (NYSE: FIS) to spin off its Worldpay payments unit. FIS shares have fallen more than 30% since settlement while the S&P 500 gained over 76%. The pattern is consistent: bold demands, board seats won, value destroyed and a quick exit before the bill comes due. Unfortunately, the policy stakes here go well beyond one company’s stock price. The Trump administration has correctly identified housing affordability as a crisis and is pursuing a serious agenda built on expanding supply, cutting red tape, and putting American families ahead of institutional investors. CoStar’s Homes.com investment is squarely aligned with that agenda. It introduces competition into a concentrated market. It offers consumers a more transparent experience. It recently launched Homes AI, a conversational AI tool that helps homebuyers navigate their search using proprietary data no competitor can replicate. The company has committed to cutting Homes.com spending by over $300 million this year and projects the platform will reach profitability by the end of the decade, with company-wide revenue growth of 18% and an 83% increase in adjusted EBITDA in 2026. The Securities and Exchange Commission’s push to allow semiannual reporting, backed by the President, reflects a growing recognition that the quarterly earnings treadmill empowers exactly this kind of short-horizon activism at the expense of the long-term investment and job creation that actually build a stronger economy. President Trump is right that Wall Street should not be allowed to compete with Main Street when it comes to buying homes. The same principle applies to building the platforms that help Americans find and buy those homes. If Third Point and D.E. Shaw get their way, there will be one fewer competitor in residential real estate, less transparency for homebuyers, and more pricing power for the incumbent monopoly. That is not a free-market outcome. It is the kind of Wall Street self-dealing that voters sent this President to Washington to stop."

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3/9/2026

Investors Target Food Companies as Growth Slows. Lamb Weston Is the Latest

Barron's (03/09/26) Liu, Evie

Investor pressure is mounting across the packaged-food and restaurant industries, with sluggish sales growth and shifting consumer habits drawing investors looking to unlock value. The latest example is Lamb Weston (LW), the frozen-potato supplier behind french fries served at chains like McDonald’s (NYSE: MCD) and Chick-fil-A. Starboard Value has built a sizable stake in the Idaho-based company and is urging faster cost cuts and operational improvements to revive the stock. The push comes after Lamb Weston’s shares tumbled 12% over the past year, weighed down by slowing restaurant demand and lower margins due to price cuts. Investors are also concerned that the company has expanded production capacity too aggressively as consumers are pulling back. Starboard joins Jana Partners, which already reached a settlement with Lamb Weston last year to add representatives to its board and push for operational changes. But Starboard believes progress should come faster. Food manufacturers and restaurant chains—long viewed as stable defensive businesses—have become fertile ground for investors as growth stalls and consumers push back against years of price increases while increasingly seeking healthier alternatives. Last year, Elliott Investment Management built a $4 billion stake in PepsiCo (PEP), pushing for cost reductions, divestitures, and sharper strategy. PepsiCo said it plans to reduce roughly 20% of its U.S. product offerings as part of a cost-cutting agreement with the investor. J.M. Smucker (NYSE: SJM), the maker of Folgers coffee and Uncrustables sandwiches, recently agreed to appoint two new directors as part of a settlement with Elliott following pressure for operational changes. It is not disclosed how much stake Elliott has in the company. Keurig Dr Pepper (NASDAQ: KDP) also faced investor scrutiny after announcing an $18 billion acquisition of JDE Peet’s, which had investors worried about its debt load. The deal announcement sent share prices down sharply. Starboard soon built a stake and began pushing management for changes. In the restaurant sector, Jack in the Box (NASDAQ: JACK) has been locked in a contentious battle with Sardar Biglari, whose investment firm built a 9.9% stake in the fast-food chain and pushed for leadership changes after years of declining sales and shareholder returns. Biglari launched a proxy campaign aimed at replacing longtime Chairman David Goebel and reshaping the board. At the 2026 annual meeting, shareholders re-elected the full slate of directors, though the company later replaced the chairman under investor pressure. Meanwhile, Nelson Peltz, the investor who owns about 16% of Wendy’s (WEN) outstanding shares, said shares in the fast-food chain are undervalued and his firm may explore ways to enhance shareholder returns, including potential leadership adjustments or transactions such as a merger or sale. The wave of activism underscores how challenging the environment has become for food companies. But the challenges have also created an opening for investors to push for cost cuts, portfolio pruning, or even corporate breakups to unlock value. For investors, the sector offers a compelling setup: Many companies still control globally recognized brands and large distribution networks, yet their stocks have lagged behind the broader market as growth slows and margins come under pressure. If restaurant traffic remains soft and packaged-food volumes fail to rebound, investors may increasingly engage companies they see as slow to adapt—even the most familiar names in the grocery aisle or drive-through lane.

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3/8/2026

Opinion: Beyond Bidets Lies the Overlooked Plumbing of AI

Bloomberg (03/08/26) Reidy, Gearoid

Bloomberg Opinion columnist Gearoid Reidy writes that a Japanese maker of high-tech toilets has been causing a splash in the world of artificial intelligence. Palliser Capital recently called on the management of Toto Ltd. (TYO: 5332), best known for its Washlet bidets, to do more to highlight that the firm is a growing AI play, thanks to its advanced ceramics segments. Toto is the “most undervalued and overlooked AI memory beneficiary,” Palliser wrote. Its little-known chips parts business recently accounted for half of its operating profit. Yet just a page was dedicated to it in the most recent investor presentation, with the limited disclosure leaving its value “effectively hidden from the market,” the fund said. That one of the world’s biggest toilet makers is actually a growing chip supplier won’t come as a surprise to regular readers of this column. But Palliser has a point here — and it’s one that extends beyond the porcelain throne. Japanese firms often struggle to tell their success stories, particularly if they’re diversified or in niche industries. Carefully stage-managed domestic media engagements tend to dominate. While disclosure is improving, getting information out of some firms can still be akin to pulling teeth. Worse, for years even companies that were proactive often found it hard to reach a receptive audience. But things are changing in the era of artificial intelligence and robotics, where Japan has vast expertise in specialty chemicals and wafer substrates, sensors and motors. The country might have fallen behind in the age of software, but these physical hardware supply chains are exactly the kind of industries where firms still have an edge. While some bemoan the lack of “creative destruction” in the economy, innovation simply happens differently. Like Toto, companies reinvent themselves with alacrity and transition to new business models. Take Fujikura Ltd (TYO: 5803). It was founded in 1885, the age of steam engines and gas lamps, but is now one of the world’s hottest AI bets thanks to its optical fibers used in data centers. Shares have risen almost 25 times since the start of 2024, the best-performing Japanese blue-chip. Or Nitto Boseki Co. (TYO: 3110), which began as a silk-spinning firm in 1898, the year HG Wells published The War of the Worlds. It’s now a leading supplier of glass cloth fiber, with its stock more than quadrupling since last year amid reports of its links to Nvidia Corp. (NASDAQ: NVDA) and Apple Inc. (NASDAQ: AAPL). Printers Dai Nippon Printing Co. (7912.T), founded 1876, and Toppan Holdings Inc. (TYO: 7911), dating to 1900, might be associated with ink and paper, but are actually crucial makers of chip packaging materials and photomasks. Yamaha Motor Co. (TYO: 7272) is the subject of memes about its diverse output. In fact, the famed pianos are made by Yamaha Corp. (TYO: 7951), from which the motorbike maker was spun out decades ago. The diversification continues: Yamaha Motor aims to expand its own semiconductor backend business into a ¥100 billion ($633 million) earner by the 2030s. The advent of high-quality AI translation tools that make company materials understandable for anyone has helped. But in any language you would struggle to learn much about one of the country’s biggest companies in this sector, the notoriously secretive Keyence Corp. (TYO: 6861). Shares of the maker of sensors for automating factories have been range-bound for five years, even as sales and profits have doubled. It’s hard to think it wouldn’t benefit from a little over-the-top robotics hype. Japanese products frequently only become world famous after a little outside help. The movie Lost in Translation is often credited with awakening the world to Japanese whiskey; a handful of Australian skiers first realized the potential of Hokkaido’s now-famous powder snow. The government is currently targeting anime as a major export business, but it became globally famous not because of a top-down push, but by bottom-up fandom on pirate sites like Crunchyroll, founded by a group of Americans. Its companies need similar evangelists. Palliser says rewriting the narrative could add another 55% to Toto’s shares. So at a time when some in Tokyo are getting a little uncomfortable with the growing power of activists, they should be encouraged instead to help spread the word. In the original gold rush, it was all about picks and shovels. This time, it’s more about the plumbing.

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3/3/2026

Governance Frm y’s partners Takes Off as S.Korea’s Family-Owned Firms Face Governance Test

Korea Economic Daily (03/03/26) Seo, Sookyung

A new governance advisory firm focused on family-controlled corporations and family offices has launched in Seoul, positioning itself to serve South Korea’s founder-led business groups as they navigate generational succession and evolving governance expectations. y’s partners, founded by governance and strategic communications veteran Yvonne Park with over 25 years of experience, will advise family businesses and boards on succession planning, shareholder engagement, crisis management and governance systems and legal strategy, the company said Tuesday. Family-controlled companies account for a large share of South Korea’s listed firms, including many flagship conglomerates. As second- and third-generation heirs assume leadership roles, governance structures and capital-allocation discipline have come under closer scrutiny from investors and stakeholders. Shareholder activism in South Korea has intensified in recent years, with both foreign hedge funds and domestic investors challenging management decisions at annual meetings. Governance disputes over control, succession, and dividend policy have become more visible across sectors. At the same time, Korea’s growing cohort of wealthy entrepreneurial families is beginning to formalize family office structures – private entities that manage investments, philanthropy and succession planning. While common in the United States and Europe, the model remains comparatively underdeveloped in South Korea. y’s partners said it will advise on establishing family office governance systems, managing shareholder campaigns, designing succession frameworks, and navigating litigation-related communications.

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3/3/2026

Toyota's Buyout Deal a Bigger Win for Elliott Than for Governance

Reuters (03/03/26) Dolan, David

Toyota's (7203.T) decision to further sweeten its bid for group company Toyota Industries (6201.T) marks a win for Elliott Investment Management, which had pushed the automaker for months for a heftier bump up in price. But the increased offer is hardly a stunning victory for governance. It still does not address what investors had seen as some of the underlying issues - in particular that it was unfair to minority shareholders, even as Chairman Akio Toyoda stands to directly benefit. The world's largest automaker raised its offer on Monday for forklift maker Toyota Industries, known as TICO, for a second time, to 20,600 yen ($131) a share, valuing the bid at $30 billion. That was enough for Paul Singer's fund, which has agreed to tender its stake. In January Elliott rejected a sweetened bid of 18,800 yen a share as too low. The fund had previously said the shares were worth some 26,134 yen apiece. The buyout is aimed at allowing TICO, a key Toyota supplier, to pivot to advanced mobility technology without the constraints of short-term profit targets. The Toyota group originally offered 16,300 yen a share in June, sparking outrage from minority shareholders who said the deal was underpriced and lacked transparency. Some overseas investors even complained to the Tokyo Stock Exchange, saying the transaction went against its drive to improve governance, Reuters has reported. "The fact that the price was revised up twice, with the final offer significantly above the initial one, is clearly a better outcome for minority shareholders," said Amar Gill, secretary general of the Asian Corporate Governance Association advocacy group. "Yet various governance concerns remain," he said, citing the "questionable" treatment of group companies as independent minority shareholders and a lack of transparency over expected synergies. The association raised concerns about the buyout in an August letter to TICO and Toyota that was signed by some two dozen investors. They cited inadequate financial disclosure and said Toyota group companies should not be classified as minority shareholders, as that lowers the voting threshold Toyota would need to clinch the deal. TICO subsequently released more financial details. It has also held meetings with investors. TICO says it took steps to ensure transparency, including consulting outside directors and independent firms, and received three fairness opinions. Toyota also rejects the notion that the transaction was in any way unfair to shareholders - or that Toyoda stood to benefit unduly. The transaction will see Toyoda, the former CEO and the founder's grandson, invest about $6.5 million to boost his TICO holding to 0.5% from 0.05%, tightening his grip on the supplier. One London-based investor, who declined to be identified, said the price was "inadequate" given the asset quality, but they, like other minority shareholders, would likely have little option but to tender shares following Elliott's move. While the outcome was a "big improvement" in terms of governance in Japan compared to 10 or even five years ago, there were still "many weak points" in the deal that limited the benefit for minority shareholders, the investor said. For the bid to be successful, 42.01% of shareholders classified as minority owners need to accept the offer. That excludes Toyota Motor's 24.66% stake. The offer ends on March 16. One part of the controversy surrounding the deal is that the Toyota group has classified parts makers Denso (6902.T) and Aisin (7259.T) and trading company Toyota Tsusho (8015.T), which own a combined 12.21% of Toyota Industries, as independent minority shareholders. Toyota Fudosan, the company leading the buyout, has defended that classification, saying the group companies were independent, listed firms that made their own decisions. While the deal was widely seen as a test case for corporate governance in Japan, Julie Boote, auto analyst at Pelham Smithers Associates, said the outcome showed there was still a long way to go for safeguarding minority shareholders' rights in Japan. "The recent developments do not demonstrate that Japanese corporate governance reforms have prompted changes among companies’ attitudes towards shareholders’ rights – given that Toyota was forced to cave in and put up a fight not to do so," she said in a note to clients. Still, Gill said it was important that TICO made an independent director available to answer investor questions and that such an effort should be part and parcel of similar situations in Japan. “We believe that the company reaching out to investors to get their feedback helped in this outcome, in combination with the activist pressure,” he said.

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3/3/2026

Opinion: A Win — and a Lesson — from Toyota’s Elliott Deal

Bloomberg (03/03/26) Liu, Juliana

Juliana Liu, columnist for Bloomberg Opinion's Asia team, writes that sometimes, the most important lessons in life involve what not to do. The Toyota group may have prevailed over minority shareholders in a buyout, but the tussle showed that not even Japan’s most powerful conglomerate can get away with lowballing investors — a development that bodes well for efforts to improve the way companies are overseen. On the face of it, the dispute between Toyota and Elliot Investment Management ended amicably on Monday with an agreement that gave each side what it wanted. The group got the green light to delist one of its members, Toyota Industries Corp. (TYO: 6201), and take it private in what is expected to be the biggest ever deal of its kind. Elliott successfully campaigned for — and received — a higher price for its stake in the company. But the public nature of the clash and the criticisms leveled against Toyota for shortchanging independent shareholders demonstrate how not to run a takeover deal. A proposal for Japan’s most important conglomerate to safeguard its future should have been straightforward. Instead, it devolved into a fractious takeover fight, with some investors expressing despair over how they were being treated. That Toyota was unable to escape scrutiny sets a welcome precedent for future transactions and vindicates Japan’s decade-long efforts to raise corporate governance standards. Those steps have helped propel stocks higher and rekindled frenetic dealmaking. It was the rationale offered last June when Toyota Motor Corp.(TYO: 7203) and its related companies announced their intention to acquire the shares in Toyota Industries known as TICO and the original company from which the world’s top automaker later emerged. The idea was to eliminate a significant cross-shareholding1, and send a signal to the rest of corporate Japan to do the same. But almost immediately, independent investors — especially those overseas — complained about a slew of issues including fairness, pricing, and a lack of disclosure. This reaction would have been unthinkable not long ago, when minority shareholders often felt disenfranchised. The most concerning aspect of the offer was the alleged flouting of a voting standard that was meant to protect their rights. Seven years ago, the Ministry of Economy, Trade and Industry introduced new guidelines to promote better corporate governance. Though they weren’t legally binding, they were accepted as best practices. One of its recommendations was the establishment of a voting safeguard stipulating that a deal is approved only if the bulk of minority shareholders with no significant ties to the acquiring company vote in favor. For the purposes of the offer, three Toyota affiliates — Denso Corp. (TYO: 6902), Aisin Corp. (TYO: 7259), and Toyota Tsusho Corp. (TYO: 8015) — were classified as independent minority shareholders. They have been linked to the larger group in other disclosures, raising questions about conflicts of interest. Under METI guidelines, they should not have been designated as disinterested parties. Or so Elliott contended. This means TICO needed less support from its smaller shareholders. Another criticism was that the price was too low. Anuja Agarwal, head of research for Japan and India at the Hong Kong-based Asian Corporate Governance Association, pointed out that the January price of 18,800 yen ($119.39) offered by the buyer, Toyota Fudosan Co. — a privately owned property company that operates as the founding Toyoda family’s investment arm — implied a price-to-book ratio, a measure of how much investors are paying for a company relative to the value of its assets, well below that of comparable deals. The final offer accepted by Elliott brought the price-to-book ratio to about one, higher than the previous January proposal but still lower than similar deals. Opposition became even more vociferous after Elliott revealed in November that it had taken a significant stake in TICO in order to thwart the offer. As a result, Toyota group had to raise the offer price from 16,300 yen to 18,800 yen in January. Even so, it failed to muster enough support last month to proceed, delivering a victory to the activist fund. It was a surprise when Elliott agreed on Monday to sell its shares for a 10% bump from the January price, when the fund had previously said TICO was worth much more. With this assent, a successful completion is all but certain subject to some conditions being met. Once it goes through, the expected 5.9 trillion yen enterprise value of the buyout would make it the biggest ever acquisition of a Japanese company. Under pressure, Toyota had to raise the offer twice. Unlike in years past, investors are no longer afraid to call things out and take action to block what they consider poor deals. The benefit of this whole episode, though, is that future dealmakers should be examining their pricing strategy more carefully to avoid Elliott-style shareholder activism. The global auto industry is being reshaped by the rise of Chinese carmakers. It’s imperative for the Toyota group, home of the world’s largest vehicle maker, to be agile and strategic. Its decision to privatize TICO should be applauded. However, other investors intending to embark on their own mergers and acquisition should avoid similar pitfalls. Japan Inc. still has some work to do on greater transparency and fairness.

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