Elliott heaps pressure on Toyota with 5% stake in group firm slated for buyout

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By Daniel Leussink

TOKYO, Dec 10 (Reuters) – Elliott Investment Management has lifted its stake in Toyota Industries to 5.01%, further increasing pressure on automotive giant Toyota Motor, which plans to buy out the forklift manufacturer, a key group firm.

The U.S. activist investor, which spent 268 billion yen ($1.7 billion) on acquiring the stake, said in a Japanese regulatory filing on Wednesday that the holding was acquired for investment purposes and potentially making important shareholder proposals.

Last month, Elliott said it had a significant stake and criticised the deal as undervaluing Toyota Industries, lacking transparency and falling short of proper governance practices.

Other global investors have also asked for more disclosure of a deal that would strengthen the influence of the founding Toyoda family within the group. The transaction is being closely watched as Japan’s regulators and the government push for improved corporate governance.

Toyota Industries, which also supplies engines to Toyota Motor, is slated to be taken private by the automaker, group real estate company Toyota Fudosan and Toyota Chairman Akio Toyoda, the companies announced in June.

Toyota Industries’ shares continue to trade above the offer price of 16,300 yen per share, closing at 17,690 yen on Wednesday, suggesting investors expect a sweetened offer. Elliott’s entry adds to that pressure.

Toyota Industries and Toyota Fudosan declined to comment. Toyota Motor did not immediately respond to a comment request.

As of end-September, Toyota Motor held about 25% of Toyota Industries while Toyota Fudosan owned 5.42%. Elliott’s stake makes it one of the largest shareholders in the company.

($1 = 156.6700 yen)

(Reporting by Chang-Ran Kim and Daniel Leussink; Editing by Edwina Gibbs and Joe Bavier)