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Reuters
14-07-2025
- Automotive
- Reuters
US judge rejects lawyers' $94 million fee bid in auto parts pricing case
July 14 (Reuters) - A U.S. judge has declined to approve $94 million in additional legal fees for a group of attorneys who already collected more than $269 million in fees for securing $1.2 billion in settlements with auto parts makers. Chief U.S. District Judge Sean Cox in Detroit called the plaintiffs' fee request "excessive" in a ruling, opens new tab on Friday. Cox said the attorneys from law firms Susman Godfrey; Cotchett Pitre; and Robins Kaplan were owed more compensation for their latest and fifth settlement rounds. But the judge said the amount should be "far less" than $94 million and asked the lawyers to refile their request closer to the end of the settlement claims process. The law firms represent consumer and commercial auto parts buyers who accused auto parts makers of conspiring to fix prices. Companies including Denso; Hitachi Automotive; and Mitsubishi Electric were among dozens of defendants that settled with the plaintiffs in recent years. They all denied any wrongdoing. The litigation began in 2012, following a U.S. Justice Department probe of some manufacturers. The plaintiffs' lawyers in May asked Cox to approve, opens new tab the additional fee award, covering legal work from 2019. Several companies that are members of the class of parts buyers, including car rental dealers Hertz (HTZ.O), opens new tab and Avis (CAR.O), opens new tab, objected, opens new tab to the $94 million fee request, arguing that the lawyers had already been amply compensated. Lawyers requesting the fees at Susman Godfrey; Cotchett Pitre; and Robins Kaplan did not immediately respond to requests for comment. Hertz and Avis did not immediately respond to similar requests. In a court filing, the plaintiffs' lawyers said the $1.2 billion settlement was "believed to be the largest amount ever obtained on behalf of indirect purchasers in the history of U.S. antitrust litigation." The case is In re Automotive Parts Antitrust Litigation, U.S. District Court for the Eastern District of Michigan, No. 2:12-md-02311. Read more: US judge admonishes Amazon over disclosures in FTC lawsuit over Prime service Lawyers defend $205 million legal fee in US auto class action settlement Class action administrators, banks accused of kickback scheme in new lawsuits More lawyers join the $3,000-an-hour club, as other firms close in
Reuters
15-06-2025
- Automotive
- Reuters
Breakingviews - Toyota buyout capitalises on insiders' control
MELBOURNE, June 16 (Reuters Breakingviews) - The $33 billion offer to buy out Toyota Industries (6201.T), opens new tab rests on shareholders acquiescing in effectively financing a large slug of the deal. As a shocking example of how to engineer around Japan's shareholder value push, it's hard to beat. The proposal was unveiled earlier this month by the world's largest carmaker, Toyota Motor (7203.T), opens new tab, its Chair Akio Toyoda, and the wider group's real estate firm, Toyota Fudosan. If successful, it would unravel one of the $4 trillion economy's most complex series of value-destructive cross-shareholdings. These ownership arrangements have long protected Japanese companies from outside interference – whether from activist investors or unwanted potential buyers. But they also engender conflicts of interest and inefficient deployment of capital that hinder GDP growth. Not helpful given the population is shrinking. That's why the government and bourse operator Japan Exchange want cross-shareholdings unwound. The take-private offer for one of its own from key members of the Toyota Group – an association of multiple interconnected companies – aligns with that goal, while enjoying one last hurrah of the benefits for insiders. Between them, the three buyers own just over 30% of Industries, the firm that started the Toyota empire more than a century ago as the maker of the world's first automatic looms. Include the stakes held by other Toyota Group companies Denso (6902.T), opens new tab, Aisin (7259.T), opens new tab and Toyota Tsusho (8015.T), opens new tab, which are not directly participating in the buyers' consortium, and that ownership tally jumps to 42%. Factor in Nippon Life and other Japanese companies holding strategic stakes that tend to vote with management and the bidders may hold sway over as much as 55% of the shares, reckons Travis Lundy, an analyst who publishes on Smartkarma. That means independent shareholders probably can't block the deal. But it is egregious enough to merit close examination. Start with the transaction's structure. The three partners are stumping up about $6 billion of equity and borrowing almost $20 billion from banks to buy out the world's largest maker of forklift trucks. That's a punchy amount of leverage: equity represents just 24% of the deal. Moreover, that sum doesn't cover all of the target's stock: Toyota Motor is helping itself and its buyout partners in several ways. First, it is agreeing to hold on to its almost 25% stake in Industries until after the tender offer for all other shareholders closes. This reduces the funds the buyers need to secure upfront. Second, when Toyota Motor does sell its shares back to the target, it'll be for about $7 billion, an 18% discount to what's being offered to other shareholders. Finally, the carmaker is also putting in the most cash, almost $5 billion, but downgrading its holdings from straight-up equity to non-voting preferred shares. There are more wrinkles too. For all their talk of investing in the take-private deal, Toyota Motor, Toyota Fudosan and Toyoda are really just ploughing back in the after-tax proceeds from selling their existing Industries stakes. In Toyoda's case, it's even less: he'd get $16 million before tax from tendering his current 0.05% stake in Industries and has pledged to put in just $7 million to finance the same company's buyout. That would give him 0.5% of the new entity created to hold Industries; Fudosan would own 99.5%, a more than 18-fold increase on its present holding. Then there's the price. Expectations of a deal, first reported on April 25, opens new tab, pushed Industries' shares as high as 18,400 yen ($127.70) apiece by early June, roughly 40% above the undisturbed price. The buyout consortium's actual offer on June 3 squelched those hopes: all shareholders except Toyota Motor would get 16,300 yen a share, a 23% premium. Even getting there took some negotiating, with the special committee set up by Industries' board to consider the proposal succeeding in getting the consortium to put more money on the table. It then twice, opens new tab rejected the 16,300 yen proposal, arguing that 'it was difficult to consider that the price secured the interests of the target company's minority shareholders to the maximum extent in light of the target company's intrinsic value and other factors'. Yet it was finally accepted, even though the price was only in the middle of the range of the fairness opinions, locally referred to as share valuation reports, from SMBC Nikko Securities and Mitsubishi UFJ Morgan Stanley Securities that valued the company at as much as almost 20,000 yen a share. According to a Breakingviews analysis, it could be worth even more, meaning the deal undervalues Industries by as much as 38%. Here's how: the target's core business is worth 12,000 yen a share, or $25 billion, applying the same 13.5 times multiple carried by German rival Kion ( opens new tab to this year's estimated earnings collated by LSEG. Then its listed stakes in Toyota Motor, Denso, Toyota Tsusho and Aisin are worth almost $28 billion, with another $2 billion or so coming from its holdings in other Toyota Group entities. The four big publicly traded companies have announced they are repurchasing their own shares from the buyout target at a 10% discount as part of the deal. Assume the others do, too, and factor in what, estimates Lundy, would be an almost $5 billion tax bill, and the sales would bring in $22 billion, or 10,500 yen a share. That brings Industries' total value to 22,500 yen a share. Ideally, those buybacks would take place before the tender offer begins in December, with the proceeds returned to shareholders. Executing those deals first would make it harder for any buyer to undervalue Industries. Instead, the buybacks are slated to happen only once the tender process successfully concludes. Some of the proceeds would then fund the delayed almost 1 trillion yen, roughly $7 billion, repurchase of Toyota Motor's shares in Industries. That would leave the new owners flush with as much as $15 billion, enough to pay off three-quarters of what they borrowed. It's a deal crying out for an activist investor to put pressure on the buyers to improve their offer. Hong Kong-based hedge fund Oasis Management intends to do so, Reuters reported earlier this month. Trouble is, Industries' shareholder register is packed with friends, so it's a hard fight to win. Japan's government and regulators can easily make things friendlier for independent shareholders if they want, including by tightening rules around related-party transactions. The Toyota deal is an example of how Tokyo is giving its biggest groups sufficient room to create new protective ownership structures even as they are forced to dismantle old ones. Follow Antony Currie on Bluesky, opens new tab and Linkedin, opens new tab.
Zawya
03-06-2025
- Automotive
- Zawya
Toyota to take private key unit in $26bln deal
TOKYO - Toyota Motor will take private a key supplier of its group, it said on Tuesday, in a $26 billion deal, marking a landmark repositioning of Japan's most important corporation. Under the terms of the deal, unlisted real estate company Toyota Fudosan will launch a tender offer for shares of Toyota Industries for 3.7 trillion yen ($26 billion), the companies said. Separately, Toyota said it plans to buy back its own shares from Toyota Industries. Japanese companies have come under growing scrutiny from the market regulator and investors in recent years about their cross-shareholdings in affiliates and business partners, sparking a rise in both management buyouts and acquisitions. Many of the deals have been driven by expectations that a corporate governance overhaul will bring better shareholder returns. Toyota had said in April it was considering participating in a potential buyout of Toyota Industries - a move that sources have said would help improve the group's corporate governance. Toyota owned about 24% of Toyota Industries as of September last year, while Toyota Industries held around 9% of the world's biggest automaker and more than 5% of Denso, another major Toyota supplier and Toyota group company. Toyota Industries, formerly Toyoda Automatic Loom Works, was founded in 1926 by Sakichi Toyoda to make automatic looms. An automotive division within the company was set up and later spun off as Toyota Motor. In addition to forklifts, Toyota Industries manufactures the RAV4 sport utility vehicle for Toyota and also produces car parts such as engines, air-conditioning compressors, batteries and converters. ($1 = 142.6500 yen)
CNA
03-06-2025
- Automotive
- CNA
Toyota Industries says it will discuss Toyota Group takeover bid on Tuesday
TOKYO :Toyota Industries will decide on Tuesday whether to accept a tender offer to take the company private, it said, after several media reported that it would accept a $42 billion offer from Toyota Motor and other group companies. In a separate statement, Toyota Motor also said it would make a decision on the reported plan, but added that some media reports contained misleading information including that the total acquisition could exceed 6 trillion yen ($42 billion). Toyota Industries shares were little changed on the report, trading up 0.4 per cent while Toyota Motor was down 1.0 per cent. Japanese companies have come under growing scrutiny from the market regulator and investors in recent years about their cross-shareholdings in affiliates and business partners, sparking a rise in both management buyouts and acquisitions. Many of the deals have been driven by expectations that a corporate governance overhaul will bring better shareholder returns. Toyota Motor had said in April it was considering participating in a potential buyout of Toyota Industries - a move that sources have said would help improve the group's corporate governance. Toyota owned about 24 per cent of Toyota Industries as of September last year, while Toyota Industries held around 9 per cent of the world's biggest automaker and more than 5 per cent of Denso, another major Toyota supplier and Toyota group company. Toyota Industries, formerly Toyoda Automatic Loom Works, was founded in 1926 by Sakichi Toyoda to make automatic looms. An automotive division within the company was set up and later spun off as Toyota Motor. In addition to forklifts, Toyota Industries manufactures the RAV4 sport utility vehicle for Toyota and also produces car parts such as engines, air-conditioning compressors, batteries and converters. ($1 = 142.6500 yen)
Business Times
27-05-2025
- Automotive
- Business Times
Denso in talks to buy Temasek-backed seed maker for US$500 million
[TOKYO] Denso is in final talks to buy a Temasek-backed seed supplier for around US$500 million, as the Japanese vehicle parts supplier deepens its expansion into the agriculture sector, sources familiar with the matter said. Singapore investment firm Temasek, which owns almost half of Axia Vegetable Seeds Group, is set to generate a profit from the sale, the sources said, asking not to be identified because the negotiations are private. Representatives for Denso and state-owned Temasek declined to comment. Netherlands-based Axia did not immediately respond to a request for comment made outside of normal office hours. A purchase would align with Denso's ambition to become a key supplier of industrialised greenhouses capable of producing food in any climate. The company is seeking to generate 20 per cent of its revenue from 'new value business' including food and agriculture, it said in 2023. The auto business currently accounts for more than 98 per cent of its revenue, according to data compiled by Bloomberg. Denso acquired greenhouse maker and horticultural solutions provider Certhon Build BV in 2023, and has been developing robots able to pick fruits and vegetables such as tomatoes. It has said its share of the 700 billion yen (S$6.3 billion) market for greenhouses and adjacent segments is only about 2 per cent, with room to grow. For Temasek, Axia is the latest in a series of asset sales involving its investees and subsidiaries. Axia also sold its open-fields seeds business to India's Namdhari Seeds earlier this year. Olam Group, a Temasek-owned food and agriculture trader, agreed to sell a controlling stake in its agribusiness unit to Saudi Agricultural & Livestock Investment in a US$1.8 billion deal in February. BLOOMBERG
