2/12/2026
Elliott’s Toyota Clash Highlights a $5.5 Billion Japan Play
Bloomberg (02/12/26) Du, Lisa
Elliott Investment Management has bet billions applying its tough style of investing to Japan. But the firm will have to wait a little longer to find out whether it can add Toyota to its list of wins. The U.S. hedge fund is trying to thwart a proposal led by business magnate Akio Toyoda to take private Toyota Industries Corp. (6201.T), a sprawling manufacturer which fathered the world’s largest automaker. Elliott, which has amassed a stake of more than 7% in the ¥6.4 trillion ($42 billion) company, thinks the price is too cheap — and has said so repeatedly. After months of wrangling that included an increased bid from Toyoda’s group, the tender offer deadline hit on Thursday — and was quickly extended to a new date of March 2. The group didn’t raise its offer price. The ultimate outcome of the deal will offer clues for how far Elliott and other funds can influence a corporate culture that has undergone a makeover in the last few years but where investors are still largely expected to be seen but not heard. “If Elliott can block this tender offer, that will set a big precedent,” said Kazunori Suzuki, a finance professor at Waseda Business School. “The Toyota case is a big test for how serious Japanese companies’ managements are about improving governance.” Elliott isn’t alone among foreign funds in Japan. The likes of Hong Kong-based Oasis Management and the UK’s Palliser Capital have also run campaigns in the country for years. But activists in Japan have typically focused on small- to medium-sized companies, which make it easier to amass big stakes and pressure management. Elliott, an $80 billion firm which has built its reputation calling for change at corporate giants, is among the few willing to hunt the big game. Four of Elliott’s top dozen public equity holdings by market value are in Japan, worth more than $5.5 billion, according to data compiled by Bloomberg as of Wednesday. Toyota Industries is now its third-largest holding globally, with a stake valued at almost $3 billion. Consultants who work with Japanese companies on defense strategies for activists say the firm, founded by billionaire Paul Singer, is viewed as uniquely intimidating. Executives often shift into crisis mode as soon as Elliott appears on their company’s shareholder list, the consultants said. “Japan has very quickly become one of the activist hotspots globally, and Elliott has played a leading role,” said Walied Soliman, the co-chair of law firm Norton Rose Fulbright’s special situations team, who has advised funds, as well as companies in the United States and Canada on activism defense — including against Elliott. “It would be very ill-advised to ignore an Elliott in your stock.” Toyota Industries and Toyota Fudosan Co., the private company leading the tender, said in response to questions from Bloomberg News that they believe the offer price accurately reflects the intrinsic value of the business. Elliott has been reshaping its Asia operations after closing its Hong Kong office in 2021 and its Tokyo space a year later, shifting its regional investment teams to London. The firm stepped up its Japan activities after hiring Aaron Tai from Cornwall Capital in 2023 to lead investments in the country. Tai has built up the team by recruiting two Japanese investment analysts, adding headcount for research and drawing on the firm’s broader engagement resources. Based in San Francisco, he travels to Japan often and reports directly to Gordon Singer, managing partner and the son of Paul Singer. Tai cut his teeth investing in Japan during a decade-plus career at Cornwall, one of the firms depicted in The Big Short for its bets against the U.S. subprime mortgage market. His track record there offers clues to his approach. At Cornwall, Tai helped thwart a 2020 bid by refiner Idemitsu Kosan Co. (5019.T) to buy out minority shareholders of listed subsidiary Toa Oil Co. The Tokyo-based group eventually came back with a 29% higher offer. He also led Cornwall’s takeover of radio gear maker Uniden Holdings Corp. in 2022, a rare move by a foreign hedge fund. Elliott was “aware that it needed somebody with a very particular Japanese experience and they found that unique experience in Aaron Tai,” said John Seagrim, a broker at CLSA in London. “He’s not a traditional hedge fund manager — he’s an agent of change.” The fund publicized its stake in Toyota Industries in November, saying the Toyota group’s privatization bid was too low. Toyota boosted its offer by 15% to ¥18,800 a share in early January, kicking off the tender period that is scheduled to end Thursday. Elliott has continued to push back. It says Toyota Industries is worth at least ¥26,000 — or even ¥40,000 if it stays public and improves its business strategy. The shares rose 1.6% to ¥19,985 at the close of trading in Tokyo on Thursday, putting them further above the latest offer price. Tai notched up an early win when the offer was raised. Still, he is likely to face pressure given the size of the Toyota Industries investment, which is large even for Elliott and can’t remain idle indefinitely, according to a Japanese company executive that he has consulted with in the past. Japan has long been viewed as fertile ground for activists. Firms are flush with cash and assets that are undervalued. Public companies were long protected from shareholder pressure by holding stakes in each other, and domestic institutional investors rarely spoke up. That’s now slowly changing. Activists have helped push agendas for investors that might not have moved forward otherwise, said Junichi Sakaguchi, chief responsible investment officer at Sumitomo Mitsui DS Asset Management Co. “There are times when we feel relieved that someone else is willing to say, quite forcefully, what we can’t really state in such a direct, focused way.” Elliott has already scored a number of wins in Japan. Its investment in SoftBank Group Corp. (9984.T) got a boost when the company said it would buy back ¥2.5 trillion of shares in 2020. During the tussle over the future of Toshiba Corp., which was eventually taken private for $15 billion, Elliott secured a board seat. More recently, Tokyo Gas Co. (9531.T) hiked its dividend and sold off one of its real estate holdings after the fund took a stake. It has now turned its attention to Toyota Industries’ privatization, a high-profile deal that observers say has sent mixed signals on the direction of Japan Inc. On one hand, it’s the latest step in a long process of unwinding cross-shareholdings across Toyota group companies, a potent symbol of Japan’s corporate governance overhaul. But questions over how the group is unwinding that structure — and how much it is willing to pay to do so — opened the door for Elliott to step in. “Toyota gave them the perfect opportunity to tackle them,” said Suzuki, the Waseda professor. Elliott has “been searching for some chance to do that, and I think they found it.”
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