Fudosan finally breaks through
After a battle of wits with activists and minority shareholders, Toyota Fudosan wins the right to fully privatise Toyota Industries. Not the Toyota Group's finest moment.
After a grinding battle of wits with shareholders of Toyota Industries (TICO) lasting more than two months, Toyota Fudosan announced today that it had at last won its prize and secured well above the 42.01% needed to take TICO private. This figure is the difference between Toyota Motor's 24.66% stake in TICO and the ownership level required to force a squeeze-out in Japan--66.67%.
In the end the number of shares tendered by shareholders other than Toyota Motor totalled 191,087,116--or 63.60% of the company. A clear win, but one delayed by strong opposition from minority shareholders, led by Elliott Management of the US.
Originally announced in June 2025 at a price of ¥16,300 per share, the formal tender offer for TICO did not start until mid-January 2026 following completion of overseas regulatory approvals. By then Toyota Fudosan had sweetened the offer to ¥18,800 to placate unhappy shareholders. Still it failed to secure enough shares by the mid-February 2026 deadline, falling around 10% short. After a game of chicken with Elliott, during which it threatened to walk away, Fudosan made its final offer of ¥20,600 in early March. Elliott accepted and most assumed, rightly as it turned out, that other minority shareholders would too.
Without repeating our criticism of the Toyota Group's overall management and governance of this case (see Toyota tests the system, falls short) or our views on how Japan will likely come out a net winner (see TICO take-private: And the winner is...), two quick comments are worth making.
The first, which will excite aficionados of privatisations, is that Fudosan fell agonisingly short of the 90% stake needed to be declared a "special controlling shareholder" in Japan and thus be able to force a sale of the remaining shares. Other developed markets have similar squeeze-out rules. Unfortunately for Fudosan, it only reached 88.26%. This is the sum of Toyota Motor's 24.66% and the 63.60% which Fudosan secured through the final tender offer. It must now organise an EGM to vote on a share consolidation, after which it can complete the squeeze-out.
The other interesting fact, barely commented on, is that treasury shares must be excluded from tender offer calculations in Japan. Since TICO had more than 25 million of these, accounting for 7.78% of its total issued capital when the privatisation was first announced in June 2025, the volume of shares being fought over was not 100% but 92.22%. In other words, Fudosan only needed to secure two-thirds of this lesser figure, or just under 62% of total shares, to achieve a squeeze-out. The fact it could not achieve this the first time around is further evidence of a case badly handled.
Copyright: Ninepin Ltd, 2026