Paul Singer, the billionaire hedge fund founder of Elliott Investment Management, is known for firing Jack Dorsey from Twitter (now X) and for hijacking an Argentine navy ship to recover billions in private debt. But arranging this week’s sale of a 7.1 percent stake in Japan’s Toyota Industries as part of a nearly $43 billion takeover may prove his most significant victory yet.
The singer, 81, pushed Akio Toyoda, grandson of Toyota founder Kiichiro Toyoda and current chairman of Toyota Motor, to raise his bid for Toyota Industries, eventually commanding a 26% premium over last summer’s initial bid. The higher price is expected to bring Elliott about a profit of $500 million to its stake.
The headline-grabbing operation is also being heralded as one of the largest activist interventions by an American hedge fund in Japan, attacking the country’s long-entrenched, or “keiretsu,” system. For decades, that structure has allowed corporate groups and founding families to exercise control over their subsidiaries and influence valuations, often to the dismay of minority shareholders.
Toyota Industries once sat at the heart of the Toyota empire. The company traces its roots to the auto weaving business founded by Sakichi Toyoda (Kiichiro’s father) and later the forefather of the Toyota Motor company. Today, it is a publicly traded manufacturer of forklifts and industrial equipment and a major supplier to Toyota. It also owns approximately 9% of Toyota Motor’s shares, making it a critical component of the group’s structures.
Akio Toyoda has been leading the effort to privatize Toyota Industries, arguing that closer integration with the wider Toyota group will allow it to run more efficiently and invest more in next-generation mobility technologies. Critics say the proposed acquisition undermines the company.
The conflict began last summer, when Elliott disclosed a nearly 7 percent stake in Toyota Industries, making it one of the largest foreign shareholders. In June, Toyota Fudosan—the real estate division of the Toyota group and a key investment vehicle for the Toyoda family—launched a tender offer to take the company private.
The opening bid was ¥16,300 per share (about $109), about 11 percent below the market price at the time. Elliott rejected the offer, calling it insultingly low. Toyota later raised the offer to ¥18,800 (about $125) per share, but Elliott dismissed the increase as cosmetic.
In the months that followed, Elliott escalated the fight. The hedge fund distributed a detailed 52-page presentation to investors in New York and Tokyo, saying Toyota Industries was worth at least ¥26,143 per share (about $175) and possibly ¥40,000 (about $267) by 2028 if governance improvements and governance changes are made.
Singer also used Japan’s 2023 takeover guidelines issued by the Ministry of Economy, Trade and Industry, or METI, designed to strengthen the protection of minority shareholders in corporate takeovers. The guidelines encourage boards to ensure fair valuation and transparent processes when shareholders seek to find a listed affiliate.
Other investors have joined the criticism. Several minority shareholders have publicly questioned Toyota’s approach, saying the deal has revived long-standing concerns about Japan’s corporate governance system, including murky valuations and conflicts of interest between different shareholder groups. The Financial Times quoted one shareholder at Toyota Industries as expressing “deep despair” at the company’s treatment of minority investors.
Facing mounting pressure—and realizing that getting approval from outside shareholders would be difficult without Elliott’s support—Toyota Fudosan raised the offer again on March 2 to ¥20,600 per share (about $137).
However, the result may not end the drama. A few investors may still refuse to tender their shares, hoping that the price will eventually rise closer to Elliott’s long-term valuation. Toyota Industries stock recently traded higher than the stock price, suggesting investors believe further upside is still possible.
Under Japanese takeover laws, Toyota must secure sufficient shareholder support to proceed with the privatization. The bid is backed by financing from Japan’s three largest banking groups—Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group—and is scheduled to close on March 16.
Either way, by forcing one of Japan’s most powerful industries to lift its promise, Singer delivered a message to Japanese business. With an estimated $4 trillion sitting on the balance sheets of Japanese companies, activists see a huge untapped amount. Elliott’s success could pave the way for a new era of activism in Asia, where even storied conglomerates like Samsung or Mitsui could no longer hide behind culture.
