Toyota Motor Corporation’s decision to further raise its offer for group company Toyota Industries Corporation has been welcomed as a victory for activist investor Elliott Investment Management, which had pressured the automaker for months to increase the bid.

However, the sweetened offer does not fully address concerns raised by minority shareholders about governance and fairness. Critics argue that the deal still appears to favour controlling interests, including Chairman Akio Toyoda, while offering limited protection for smaller investors.

On Monday, Toyota raised its bid for Toyota Industries—also known as TICO—to 20,600 yen ($131) per share, valuing the deal at roughly $30 billion. The move persuaded Elliott to agree to tender its stake, marking a shift after the fund previously rejected an 18,800 yen offer as insufficient. Elliott had earlier estimated the shares were worth around 26,134 yen each.

Toyota Industries, a key supplier of forklifts and mobility equipment, says the buyout is intended to allow it to invest in advanced mobility technologies without being constrained by short-term profit pressures.

The initial offer of 16,300 yen per share, made in June, sparked discontent among minority shareholders, who argued that the price undervalued the company and lacked transparency. Some overseas investors even complained to the Tokyo Stock Exchange, claiming the transaction undermined efforts to improve corporate governance.

Corporate governance experts acknowledged that the higher price represented progress for minority investors but said broader issues remain. Critics note that Toyota group companies—including Denso Corporation, Aisin Corporation, and Toyota Tsusho Corporation—are being treated as independent minority shareholders despite close ties to the parent group.

Advocacy group Asian Corporate Governance Association said the repeated price revisions were positive but warned that questions persist over transparency and the classification of related companies as independent shareholders.

Toyota Industries responded that it had sought fairness and transparency by consulting independent directors and external advisers and obtaining multiple fairness opinions. Toyota also rejected claims that the transaction disadvantages minority shareholders or that Chairman Toyoda would gain undue benefits.

Toyoda, the former CEO and grandson of Toyota’s founder, plans to invest about $6.5 million to increase his stake in Toyota Industries to 0.5% from 0.05%, slightly strengthening his influence in the supplier.

Some investors still consider the price inadequate relative to asset quality but acknowledge that Elliott’s participation increases the likelihood the deal will proceed. For the buyout to succeed, at least 42.01% of minority shareholders must accept the offer; Toyota Motor’s 24.66% stake is excluded from the calculation. The tender period ends on March 16.

Debate also surrounds the classification of group companies as independent shareholders. Critics argue that treating related firms as minority investors lowers the voting threshold required to approve the deal. Toyota Industries maintains that these companies are separate listed entities making independent decisions.

Analysts say the transaction is being closely watched as a test of Japan’s corporate governance reforms. While improvements have been made, some experts argue that minority shareholder protections remain insufficient.