The Toyota Industries logo located at the Nagakusa Factory in Obu City, Aichi Prefecture.
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Shares in forklift maker Toyota Industries soared to a record high on Thursday, a day after Toyota Motor Corp. raised its tender offer price for the company by more than 15% to more than $35 billion.
Toyota Industries’ stock price rose about 6% to 19,080 yen, surging above the company’s revised offer price and indicating investors are likely expecting a more favorable deal.
Shares in Toyota Motor Corporation, the world’s largest automaker by sales, rose more than 2%.
Toyota Motor Corporation announced late Wednesday that it has increased its offer to buy the group company to 18,800 yen ($118.11) per share from the 16,300 yen per share announced last June, moving forward with plans to take the company private.
Last year, Toyota Motors attempted to acquire Japan’s largest corporate group for 4.7 trillion yen. The agreement included 1 billion yen from Chairman Akio Toyoda and approximately 700 billion yen in non-voting preferred stock from Toyota Motor Corporation.
Toyota Industries announced in December that it had asked for a higher amount, citing concerns that the deal’s chances of success were limited.
“Although the revisions represent an all-time high, they are definitely still at a light level,” said Arun George, global equity research analyst at SmartKarma.
He said it was below the median of the valuation range set by independent advisers, suggesting the company may still be undervalued.
Toyota Industries, which founded Toyota Motor Corporation, produces a variety of products such as forklifts, engines, electronic parts, and press molds.
“I expect some interesting movement on this deal. This is the largest mispriced acquisition in Japan in some time. To be clear, I expect activist action,” said independent analyst Travis Lundy, adding that he expected activists to demand higher prices or try to block the deal.
According to the latest sales and production report, Toyota Motor Corporation’s global production volume in November decreased by 5.5% to 821,723 vehicles, marking the first year-on-year decline in six months. Global sales also fell 2.2% year over year, and the company reported lower sales in China as the country scaled back purchasing subsidies in certain regions.
The company has been hit hard by U.S. tariffs, predicting an impact of 1.45 trillion yen (more than $9 billion) in the fiscal year ending in March.
Last November, Toyota announced it would invest $912 million across its U.S. manufacturing facilities in five southern states as part of a broader plan to invest up to $10 billion in the U.S. by 2030.
