Toyota under investor pressure: Controversial privatization attempt tests Japan's corporate reforms – Bloomberg

Global investors are closely watching how the automotive giant Toyota will address the dissatisfaction of minority shareholders over its 4.7 trillion yen plan to privatize its affiliate TICO. The deal has become a serious test for the corporate reforms that Japan has actively implemented in recent years. This is stated in a Bloomberg article, writes UNN.

DetailsOver the past decade, Japan has significantly updated its corporate governance rules, which has contributed to the growth of the stock market and revived interest in M&A deals. But now these changes are undergoing a serious test: investors have sharply criticized Toyota’s attempt to strengthen control over TICO – a company from which Toyota Motor itself once grew.

Smaller shareholders claim that the proposed buyout price by Toyota Fudosan – 16,300 yen per share – is unfairly low: it was below the market price on the day of the announcement and significantly lower than the current stock market value (over 17,000 yen). In addition, investors complain about the opaque process, lack of explanations, and risks of increased conflicts of interest within the holding structure.

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The criticism was voiced in a joint letter signed by two dozen global investors and the Asian Corporate Governance Association. They warn that a poorly executed deal could set back the reforms that Japan is proud of and that inspire neighboring markets, including South Korea.

For Toyota, this is not only a financial but also a reputational story: the outcome of the process will determine whether the country can finally abandon the outdated “parent-child” model, for which Tokyo is criticized for low capital efficiency.

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