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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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3/3/2026

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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2/27/2026

Target's Management Under Fire as Investors Agitate for Change

Reuters (02/27/26) Cavale, Siddharth

Over the last three years, retailer Target (TGT.N) has weathered intense criticism from consumers who have questioned its merchandise choices and policy decisions. Now it has another unhappy group to deal with: shareholders who are questioning management's decisions on everything from executive leadership to its plans to rebuild its reputation with the broader public. While big-box retailers like Walmart (WMT.O) and Costco (COST.O) have taken advantage of Americans' cost-conscious shopping, Target has struggled. Profit has dropped 14% over the last five years. Its shift away from diversity, equity and inclusion initiatives in the wake of Donald Trump's return to the White House angered part of its consumer base and many long-time merchants. The DEI rollback prompted a boycott that hurt sales, then CEO Brian Cornell admitted. The company's market value is now $52 billion, about half of what it was in 2021, while Costco's value has risen to more than $430 billion, and Walmart's market cap has surpassed $1 trillion. Against that backdrop, several groups of Target investors are agitating for change. Major New York and California pension funds are supporting a proposal that would ensure independent board chairs after Cornell was elevated to board chair. Another investor group is pushing for answers to what it sees as missteps that have harmed its reputation with customers and cut into sales. "We are concerned that a series of recent public-facing decisions and communications by the company may have introduced reputational, operational, and financial risks at a moment when Target is already navigating a challenging competitive and macroeconomic environment," a group of 27 investors wrote in a Friday letter to the company's board and executive leadership, seen exclusively by Reuters. The investors did not propose specific fixes. It adds up to a challenging road for CEO Michael Fiddelke, who officially took the helm on February 1. He is expected to discuss his priorities for the year when the company reports results on March 3. The company is expected to report a 2.65% decline in same-store sales for 2025, according to LSEG data. "Target's top priority is getting back to growth, and our strategy to do so is rooted in four strategic priorities: leading with merchandising authority, providing a consistently elevated shopping experience, leveraging technology and strengthening team and community," the company told Reuters in a statement, noting it speaks regularly with investors. "We are confident the execution of this plan will drive the business forward and deliver sustained, long-term value for shareholders.” Since Fiddelke was named the next CEO in August 2025, he has cut 1,800 corporate roles and announced $1 billion in store investments. He later elevated two veteran merchandising executives to chief operating officer and chief merchandising officer and named two new board directors. "We believe the refresh of C?suite roles meaningfully improves execution potential and injects renewed strategic momentum into the organization," said Corey Tarlowe, Jefferies analyst, saying it "reinforces our view that TGT is taking deliberate steps to position the company for its next chapter of growth." Target’s merchandise was once a competitive advantage, earning it the playful name "Tar-zhay" for its cheap-chic apparel, but it has lost ground as competition from Walmart, Amazon (AMZN.O) and Costco intensifies. Shoppers have complained about out?of?stock issues and long checkout lines. "The strategy needs correction and execution needs improvement," Gerald Storch, Target's vice chairman between 1993 and 2005, told Reuters. "You see long lines, hyper?promotional deals, and a loss of focus on value," Storch said, pointing to the mix of buy?one?get?one offers and perks that contrast with everyday low prices at Walmart and Costco. The 27 investors asked how the retailer is evaluating reputational risks, including customer boycotts, and its plan to avoid letting external pressures undermine efforts to rebuild trust, increase traffic and stabilize earnings. Those investors collectively manage $150.5 billion in assets, and are led by Trillium Asset Management and Mercy Investment Services. Their letter added that "backlash from recent strategic adjustments" had affected "customer loyalty and foot traffic." According to a source familiar with the letter, this was a reference to Target's decision to back away from DEI, and its silence before speaking out about raids conducted by U.S. Immigration and Customs Enforcement officers at stores in the Minneapolis area, where the company is based. Other shareholders are upset with Target's decision to elevate longtime CEO Cornell to executive chairman, a position that continues to have operational oversight over Fiddelke. At least six investors that collectively own $500 million in Target shares, including the New York State Comptroller’s Office, the California State Teachers' Retirement System (CalSTRS) and the California Public Employees' Retirement System (CalPERS), are in support of a push from shareholder advocacy group The Accountability Board that would make future board chairs independent. The proposal will be put to a non-binding vote at Target's annual meeting in June. Target's independent board members did not respond to multiple calls and emails seeking comment on the investors' corporate governance concerns. Officials at the New York State Comptroller's Office, which holds roughly $50 million in shares, told Reuters that they want Cornell to relinquish his board seat, citing disappointment with Target's retreat from diversity initiatives and the level of oversight surrounding these changes. Six similar proposals since 2014 at Target have failed, with support peaking in 2014 at 45.8%. Matt Prescott, president of The Accountability Board, believes the campaign has more momentum this year with the arrival of an investor. Toms Capital Investment Management took a 0.6% stake as of December 31, seeking to turn around Target's grocery business among other priorities, according to a source familiar with its thinking. TCIM declined comment; co?founder Ben Pass did not respond to multiple requests for comment. After Reuters asked Target about investor concerns related to its governance structure, the company added a statement to its website emphasizing that all board members except Cornell and Fiddelke are independent under New York Stock Exchange standards, and that no other directors are current or former employees. The website now includes a table listing directors' affiliations with other corporate boards.

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2/26/2026

Korea's Market Rally Shifts Tone in Shareholder Activism

Korea Herald (02/26/26) Eun-byel, Im

Activist hedge funds were once treated as unwelcome agitators in South Korea, often turned away at corporate doorsteps. Wary of short-term pressure and hostile campaigns, management viewed them as disruptive forces threatening their control and stability. While a full detente has yet to emerge, the mood is shifting. Amid a blistering stock market rally, shareholder activism has moderated, as rising valuations ease the urgency for direct confrontation. On top of that, corporations appear increasingly willing to engage — and in some cases quietly welcome -- activist scrutiny as a catalyst to lift share prices and narrow the long-standing “Korea discount.” “South Korea activism slowed moderately in 2025 as a rapidly rising stock market was seen to reduce the need for direct action by shareholders,” Diligent Market Intelligence said in a recent report. The number of Korea-based companies subject to activist demands fell to 60 in 2025, down from 66 in 2024 and 77 in 2023. DMI attributed the decline largely to the sharp rally in domestic equities, noting that rising market values may have reduced the immediate need for proxy fights and public campaigns. Industry officials suggest the shift is not merely cyclical but structural. Traditionally, many conglomerates have tolerated undervalued share prices to help founding families maintain control with relatively small stakes and to limit their inheritance and tax burdens. That calculus is beginning to change. The government's push to boost corporate valuations and improve shareholder returns has altered incentives. Companies are paying closer attention to the performance of their shares and reassessing their stance toward activist investors. “SK Square is said to be satisfied with Palliser Capital's campaign last year. This marks a striking contrast to its previous wariness toward such campaigns,” said an official closely associated with foreign hedge funds investing in Korea. In October 2024, British investment manager Palliser Capital disclosed it had more than a 1 percent stake in SK Square (KRX: 402340), the investment arm of SK Group, and pushed the company to unlock value through expanded investments and larger treasury share buybacks. From then, SK Square's shares surged more than sevenfold, rising from around 78,000 won to roughly 560,000 won earlier this month, before reports surfaced that the fund had trimmed part of its holdings. While the stock climbed alongside the Kospi rally and a semiconductor-driven boost which lifted its affiliate SK hynix's (KRX: 000660) valuation, Palliser Capital's activist campaign was also a key driver of the increase, according to industry officials. In recent weeks, SK Square has seen a further surge in its stock, closing daytime trading at 679,000 won on Thursday, as U.S. hedge fund Third Point pushes the company to enhance its valuation. “Foreign activist funds increasingly share the view that Korean corporates are now willing to engage, something that was not possible in the past,” the official said. “Building on that consensus, more funds are showing interest and asking about companies here.” Palliser Capital has since launched a campaign engaging LG Chem (KRX: 051910), proposing measures that include the introduction of nonbinding shareholder proposals and the appointment of independent directors. LG Chem has agreed to put the proposals forward at its March shareholders' meeting — a development seen as significant in Korea's corporate environment. Though acceptance of the proposals remains uncertain, industry watchers say the mere fact they are formally tabled marks progress. “There is a clear shift in corporate mindset,” said an executive at a U.S. hedge fund that has long engaged with Korean companies. “There is still a long way to go, but even having the conversation itself is meaningful.” “Top Kospi companies have begun canceling sizeable volumes of treasury shares, reflecting both anticipation of tighter rules and a willingness to position ahead of the regulatory curve,” said Christy Tan, senior investment strategist at Franklin Templeton Institute. “We are encouraged by what we are seeing so far.”

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2/26/2026

Commentary: LSEG's Elliott-Lite Playbook May Just Be Enough

Reuters (02/26/26) Unmack, Neil

"London Stock Exchange Group (LSEG.L) is borrowing from the activist investor playbook, but only to a limited extent. The $57 billion data-to-exchange group on Thursday announced, opens new tab a share buyback alongside new revenue growth and EBITDA margin targets. The moves reinforce the case that artificial intelligence won’t kill the group, and should also go some way to pleasing pushy investor Elliott Management. But LSEG boss David Schwimmer will need to show he can keep reviving the depressed stock," says Neil Unmack, Reuters Breakingviews Associate Editor. "Schwimmer is doubly under pressure. Before Thursday, LSEG's shares had fallen nearly 30% in a year, amid fears that AI groups like Anthropic could replace or undercut financial data companies. And Elliott, known for sometimes hostile activist campaigns, popped up with a shareholding, raising expectations of a large share buyback, cost cuts and asset sales. LSEG is the largest customer of Breakingviews' owner Reuters, which provides news for the Workspace terminal and other products. While Elliott has not publicly articulated its demands, Schwimmer’s moves only go some way to meeting those that have been reported. LSEG's new 3-billion-pound share buyback is twice analysts' expectations, but trails the 5 billion pounds possible target that Elliott might have wanted, as suggested by a Reuters report. And Schwimmer seems opposed to radically changing the LSEG structure, which includes business from clearing, indexes, post-trade services as well as bourses. The case for such radical change, so far, is unclear. Selling down stable and richly valued assets like Tradeweb Markets (TW.O), or taking on more debt to turbocharge buybacks, would leave LSEG with less flexibility. Shareholders may also end up more exposed to the businesses that may be vulnerable to AI disruption. Schwimmer’s best defense, both to market panic and Elliott, is to show that his plan is working. Hence Thursday’s stated ambition to grow revenue at a "mid to high single digit" rate between 2027 and 2029, and to boost the EBITDA margin by 1.5 percentage points. While those targets are broadly consistent with analysts’ expectations, per Visible Alpha data, they should reassure that AI destruction is not on the horizon. LSEG is also providing more data on how AI is boosting its business. That includes giving the number of new customers plugging its data into AI models, or the fact that LSEG has achieved a 51% reduction in data quality issues over four years. Additional disclosure on customer retention rates and new product use may also help. A 6% share price bump on Thursday should buy Schwimmer time from Elliott and other shareholders. LSEG is now worth around 18 times forward earnings, in line with typically more lowly-rated European exchanges Euronext (ENX.PA) and Deutsche Boerse (DB1Gn.DE). Yet it's still at a 28% valuation discount to U.S. peers MSCI (MSCI.N), S&P Global (SPGI.N), and CME (CME.O), which on average trade at 25 times forward earnings. The case for sticking with Schwimmer's activist-lite plan rests on closing that gap."

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2/26/2026

The Activist vs the Carmaker: How Elliott Forced Toyota Into $35 Billion Showdown

Financial Times (02/26/26) Keohane, David; Dempsey, Harry

A showdown between the world’s most prominent investor and biggest carmaker over a ¥5.4 trillion ($35 billion) take-private deal is hurtling towards a conclusion that could have far-reaching implications for Japanese companies and their global investors. Elliott Management has been locked in a months-long battle with Toyota Motor (NYSE: TM). The U.S. fund founded by Paul Singer, with $80 billion under management, is pressing Akio Toyoda’s group to increase its offer price to take its largest subsidiary private. But Toyoda, who has invested ¥1 billion of his own money into the privatization, and the carmaker have resisted. While Toyota Motor, which has a market capitalization of $380 billion, has raised the price for its subsidiary Toyota Industries (TYO: 6201) by 15%, it has stuck by an offer of ¥18,800 a share, a figure that Elliott contends is still not enough. What happens next — whether Toyota raises its offer price, the deal goes through or it collapses — could force Japanese companies to think harder about price to avoid a public fight and embolden other activists trying to force better offers. As activist activity has exploded in the country, similar battles are playing out at smaller companies. Oasis is in a fight for control of Kusuri no Aoki (TYO: 3549), a drugstore chain dating back to the 19th century. Effissimo Capital Management launched a successful counter-offer after the founding family of car-products company Soft99 (TYO: 4464) attempted a management buyout. “Everyone is looking at this situation and taking notes,” said an investor at a smaller activist fund in Japan. “Elliott might be unique in its size, but we are taking a lot of lessons from what they are doing.” Toyota Motor unveiled its bid to take Toyota Industries, a key parts supplier and forklift maker, private last June. The buyout would unwind one of the group’s biggest crossholdings, an out-of-favor ownership model in which companies own shares in each other and that has been the target of corporate governance reform efforts. The proposal was praised for seeking to undo crossholdings, which can lead to abuses of minority shareholder rights, and for setting the tone for the rest of corporate Japan. But it also attracted criticism from investors and corporate governance experts for its low offer and opaque valuation methods. Critics said Toyoda stood to personally gain from the transaction, while supporters suggested the move was meant to protect Toyota Industries from activist pursuits. In November, Elliott revealed a stake in Toyota Industries that has since grown to more than 7%. Toyota then raised its offer, but it remains below Toyota Industries’ share price of ¥20,240, meaning shareholders can get better returns selling in the market. A deadline of February 12 passed with Toyota failing to secure the two-thirds of shares needed to take the company private. “If one excludes the estimated longtime financial crossholders and the corporate crossholders, only 5-10% of [minority shareholders] actually tendered their shares by the deadline,” said Travis Lundy, an independent special situations analyst. Investors now have until Monday to tender their shares, but with the offer unchanged they have little incentive to do so. Elliott and other activists have made offers for specific stakes at higher levels than the tender. Elliott has said closer to ¥26,000 is a fairer price and criticized the special committee set up by Toyota Industries to evaluate the offer for eventually recommending the deal to shareholders. People familiar with the special committee’s thinking hit back, arguing that any criticism had to take into account where shares were before news of the offer broke last year. They and some investors have argued that the market price might be inflated by expectations that Elliott will launch its own tender for some or part of the company at a higher price, something people close to the fund admit is unlikely. At close to $3 billion as of January according to public filings, the Toyota Industries stake is one of Elliott’s biggest positions, though the figure could be larger as it does not include exposure through derivatives. Gordon Singer, Elliott’s co-managing partner, is directly involved and being briefed multiple times a week, said people close to the firm. In its pursuit, Elliott has gone more public and been more aggressive with Toyota Industries than in previous Japan campaigns. A person close to the fund said it did not intend “to make a big statement” when it waded into the deal, but it had “become a fight that was important for minority shareholder rights." Elliott has released a standalone plan for Toyota Industries that it claims could boost longer-term value to more than ¥40,000 a share and conducted briefings with proxy advisers, which it did not do in previous campaigns against SoftBank Group (TYO: 9984), Toshiba, and Tokyo Gas (TYO: 9531). In a letter to shareholders in January, it said a successful tender at Toyota’s current offer price would “result in a substantial and potentially irreversible setback for Japan’s corporate governance reforms." If Elliott fails to get a price boost or the deal falls apart, the fund could exit or wage a more protracted fight to reshape strategy at Toyota. Investors have long clamored for the group to buy their subsidiaries, but for Toyoda — the group’s powerful chair and a member of the founding family — the take-private is about legacy as much as economics and governance, said people close to the company. “The culture of Toyota Industries is quite important to Toyota Group people. [The deal] won’t particularly strengthen a vertical supply chain [but] Toyota Industries is part of the emperor’s family,” said one of the people. If Toyota fails to get the shares necessary again by Monday, its choices narrow. It can extend again for up to 60 business days from the original deadline without changing the terms of the tender, raise the price or walk away to potentially try again later. Regardless of the outcome, “there is a template being created here” in which boards will want to avoid a public fight, said a senior banker who specializes in defending against activists. Another investment banker said: “The advice I will give to companies with even more emphasis after this is that they need to pay a fair premium at the start or it will be a mess.”

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2/23/2026

Hedge Funds Are Betting Big on Industrials in 2026. Here Are Their Favorite Picks

CNBC Pro (02/23/26) Imbert, Fred

Industrials are the “it” sector of the stock market for hedge funds. Goldman Sachs (NYSE: GS) analyzed regulatory filings from more than 1,000 hedge funds – with gross equity positions totaling $4.4 trillion to start the year – and found that most funds are heavily overweight industrials. The bank said hedge funds entered 2026 overweight the sector by more than 7.34 percentage points relative to the Russell 3000, a record. “Hedge funds rotated toward cyclical sectors during 4Q 2025. Funds increased overweights in Industrials by +371 bp, the largest change of any sector,” Goldman strategist Ben Snider wrote. That allocation has paid off thus far. The S&P 500 industrials sector is up 14.2% year to date. That makes it the third-best performer in that time. Over the past 12 months, industrials are up a whopping 31.5%, making the sector the biggest gainer within the benchmark over that period. Goldman Sachs also found the industrial stocks that hedge funds bought into the most, looking at the ones with the largest net position increased quarter over quarter. T1 Energy (NYSE: TE), which makes electrical components and equipment, saw 36 hedge funds increase positions in the fourth quarter of 2025 from the third quarter. Shares are down 7% year to date, but they have soared more than 250% over the past 12 months. In the past three months, the stock is also up more than 128%. Carrier Global (NYSE: CARR) was also among the most popular industrial picks among hedge funds, with 33 adding to their positions. The stock has climbed more than 21% in 2026. Other popular industrials among hedge funds include ITT (NYSE: ITT), Bloom Energy (NYSE: BE), and Everus Construction (NYSE: ECG).

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