Toyota Industries shares dropped 11.9% on Wednesday after Toyota Motor’s ¥4.7 trillion bid to take the company private came in well below investor expectations.
The ¥16,300 per share offer was a steep discount to Tuesday’s closing price of ¥18,400, sparking criticism from analysts who said the deal undervalues the firm’s assets, including significant real estate holdings.
Some had anticipated an offer closer to $42 billion.
The deal will be executed through a new holding company. Toyota Motor will contribute ¥700 billion in non-voting preferred shares, with Toyota Fudosan investing ¥180 billion and chairman Akio Toyoda adding ¥1 billion.
The transaction follows pressure on Japanese conglomerates to streamline cross-shareholdings.