The Company That Started Toyota Plans to Go Private in a $34 Billion Deal
The nearly century-old Japanese company that founded Toyota Motor in the 1930s plans to go private in a deal that values the now-forklift maker at about $34 billion, with backing from the car giant's chairman, Akio Toyoda, and other group companies.
Toyota Fudosan, the group's real-estate arm, said Tuesday that it will set up an entity to start a tender offer to acquire shares of Toyota Industries and take it private.
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The real-estate firm is privately held by Toyota group companies. Toyoda serves as its chairman.
The company said it expects to control a 99.44% stake in the entity that will fully own Toyota Industries following a series of transactions, with Toyoda holding the remaining share.
Toyota Industries, from which Toyota Motor was spun off in 1937, produces forklifts, cars, engines, other auto parts and textile machinery. It was founded by Sakichi Toyoda, Akio Toyoda's great-grandfather.
Today, Toyota Motor is the biggest shareholder in the affiliate, owning about one-quarter of the company. Meanwhile, Toyota Industries has a stake of about 9% in the Japanese automaker.
Toyota Industries, which is focusing on developing autonomous technologies for forklifts and logistics management software, plans to further advance these activities through the privatization while deepening collaboration within the group.
The move comes as some corporate management teams have opted to go private in Tokyo recently as financial regulators press them to boost shareholder returns and shareholder activism gains traction. Attempts are sometimes unsuccessful, as buyouts require large sums of money.
In late April, Toyota Industries said it would oppose proposals by French investment fund Longchamp, represented by Dalton Investments, at its general shareholders' meeting next week.
Longchamp is proposing that outside directors make up most of the board to address concerns about potential conflicts of interest between its large and minority shareholders, according to filings by the Japanese company.
The real-estate company, Toyota Fudosan, said Tuesday that it will offer to buy shares of Toyota Industries for 16,300 yen each. It aims to begin the tender offer in early December.
That values the company at about Y4.9 trillion, equivalent to $34.34 billion, based on about 300 million shares outstanding.
Shares ended 0.8% higher at Y18,400 on Tuesday. They were below Y13,000 in mid-April, before the company said it received various proposals, including one to take the business private.
Group companies Aisin, Denso and Toyota Tsusho said they plan to sell their stakes in Toyota Industries in the tender offer. Toyota Motor and the three companies plan to buy back their shares from Toyota Industries following the tender offer, and Toyota Industries plans to buy back its shares from Toyota Motor after it is delisted.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
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