Toyota Motor Corporation reports a 13% drop in shares following the announcement of a $33 billion buyout of Toyota Industries.
Details of the Deal
A group led by Akio Toyoda has announced a $33 billion offer to take Toyota Industries private. The tender offer is for ¥16,300 per share, which is lower than the closing price of ¥18,400 before the announcement. This deal could strengthen the Toyoda family's control over the company.
Market Reaction to the Proposal
Investors have expressed dissatisfaction with the offered price, leading to a 13% decline in Toyota Industries' shares on June 4. At this time, Japanese firms are facing increasing pressure from regulators and investors to reduce long-standing cross-shareholding ties.
Concerns About the Offer Price
While the offered price is considered high compared to the company's shares prior to the buyout news, experts have voiced concerns. For instance, analyst Arun George noted that the offer price is below the midpoint of the value proposed by independent financial advisers.
The buyout deal for Toyota Industries remains under close scrutiny and evokes both positive and negative responses among investors.
