Toyota Motor plans to buy back 807 billion yen ($5.16 billion) of shares held by Japanese banks and insurers as part of efforts to unwind cross-shareholdings and improve balance-sheet efficiency.
The Japanese automaker said on Tuesday that it will start a tender offer to repurchase shares worth 806.8 billion yen ($5.14 billion) at Y2,781 each, representing a 10% discount to Monday’s closing price.
The buyback comes amid a governance push by the Tokyo Stock Exchange that has prompted major companies to unwind cross-shareholdings.
The practice of companies holding shares in each other has long been seen as a way to reinforce business ties in Japan. But governance experts and foreign investors say it leads to lax governance by protecting management from shareholders.
Major Banks Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group (SMFG) planned to divest Toyota shares worth a combined $8.5 billion, Bloomberg News reported last month.
Toyota said in a statement it will offer 2,781 yen per share from July 24 to Aug. 26.
Separately, SMFG, Tokio Marine Holdings and MS&AD Insurance Group said they would sell back Toyota shares to the automaker.
A filing earlier this month showed that Japanese financial groups including Tokio Marine, Sompo <8630.T)> and two MS&AD units planned to sell Honda Motor shares worth 535 billion yen.
($1 = 156.4700 yen)
