Yamauchi-No.10 Family Office (YFO), the family office linked to Nintendo's founder, which has a 28.51% stake in Toyo, said on Wednesday it would end its bid for Toyo after the company pushed back the buyout proposal, citing a lack of specifics in its business strategy.
Toyo shares sank more than 10% briefly in morning trade on Thursday.
"The share reaction was expected, but we assure that we are determined to achieve our financial targets with no changes to our plans for shareholder returns," Toyo chief executive Manabu Tokita said in an interview with Reuters.
Toyo's opposition to the buyout offer was a surprise to some investors, as a majority of the Toyo board now consists of YFO-backed directors after the investment fund reshuffled the board, which resisted its offer in June.
During a proxy fight in the run-up to the June shareholder meeting, Toyo promised to sharply boost shareholder returns in the next five years.
Tokita noted that the YFO-led board reshuffle resulted in a sharp improvement in the company's governance, including changes to management and board structure. YFO-backed directors "helped bring in insights from outside the company, and we do feel positive progress has been made", he said.
YFO said in its statement on Wednesday that it hadn't decided whether to make a fresh proposal or what to do with its stake in Toyo.
Asked about the possibility of buying back its shares from FYO, Toyo's Tokita said nothing has been decided.
(Reporting by Mariko Katsumura; Editing by Christopher Cushing and Gerry Doyle)
By Makiko Yamazaki and Mariko Katsumura
