After announcing its acceptance of the acquisition offer from Toyota Motor Corp. Sponsored ADR (TM.US), Toyota Industries' stock price soared.

Toyota Industries Corporation's stock price surged 9% in early Tokyo trading, marking its largest increase since April 28. Reports indicated that the company will accept a takeover offer led by Toyota Motor Corp. Sponsored ADR Chairman Akio Toyoda. The takeover bid is expected to be announced in May or June. Reports on Tuesday morning suggested that Toyota Motor Corp. Sponsored ADR and its group companies are considering borrowing up to 3 trillion yen (21 billion USD) to fund the deal. Toyota Motor Corp. Sponsored ADR's stock price rose 2.4% in early Tokyo trading. Media first reported Akio Toyoda's acquisition plan in April of this year, as part of a wider trend of Japanese corporate groups downsizing their numerous listed subsidiaries. This trend comes as pressure from the Tokyo Stock Exchange and activist shareholders has been growing to eliminate so-called "parent-child listings." Analyst Andrew Jackson from Ortus Advisors, stated that media reports alleviated concerns that Toyota Motor Corp. Sponsored ADR may have to engage in "secondary equity financing to fund the deal," therefore the stock price had "upside potential" on Tuesday; in addition, the reported total transaction price is in line with expectations, so it is not surprising for Toyota Industries Corporation to accept the proposal. Analyst Travis Lundy from Quiddity Advisors pointed out that if this means Toyota Motor Corp. Sponsored ADR is using its "influence and banking relationships" to let the founding family gain control, the acquisition could bring "governance issues" to Toyota Motor Corp. Sponsored ADR shareholders. However, if the banks provide enough leverage and the deal does not "severely offend" Toyota Industries' minority shareholders, it could be beneficial to investors of both companies. Lundy added that Akio Toyoda may be planning the takeover now because Toyota Industries' stock price is low after tariff-induced selling, and pressure from the Tokyo Stock Exchange for corporate reform is a factor; a bid of 6 trillion yen would offer a "considerable premium" on Toyota Industries' stock; an offer is expected to be announced within 30 days and launched within 90 days. Analyst Arun George from Global Equity Research Ltd. stated that local media reports have increased the likelihood of the deal becoming a reality, possibly happening "sooner than expected"; the rumored offer is "attractive" as it represents a 1.23 times price-to-book ratio, and offers a significant premium compared to historical price ranges; it is expected that Akio Toyoda will be able to secure the remaining financing needed, as he has "significant real estate and liquid assets."