*

Investors say offered premium is well below average of

similar

deals

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Deal likely to strengthen influence of Toyoda family in

the

group

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Investors seek clarity on conflict of interest for Akio

Toyoda

versus other shareholders

By David Dolan and Maki Shiraki

TOKYO, Oct 16 (Reuters) - Global investors have called

on Toyota Motor ( TM ) to provide more disclosure about its

planned buyout of group firm Toyota Industries ( TYIDF ),

criticising what they said was "opaque" valuation and a failure

to safeguard the interests of minority shareholders.

An August 8 letter - made public on Thursday - from some two

dozen asset managers including AllianceBernstein, Neuberger

Berman and Schroders, is likely to deepen scrutiny of a deal

that promises a landmark unwinding of cross-shareholdings and to

strengthen the influence of the founding Toyoda family within

the group.

The transaction is being closely watched as it involves an

overhaul of the country's most important corporate group and

coincides with a push by regulators and the government for

better corporate governance.

Toyota Industries ( TYIDF ), a maker of forklifts and a key supplier

to the Japanese automaker, is to be taken private by Toyota ( TM ),

group real estate company Toyota Fudosan and Toyota ( TM ) chairman

Akio Toyoda.

PREMIUM SEEN AS BELOW AVERAGE

The proposed transaction includes a 3.7 billion yen ($24.5

billion) tender offer for shares of Toyota Industries ( TYIDF ) at 16,300

yen apiece, which represents around a 23% premium to the share

price before word of the deal broke in April.

That is well below the 44% average premium in similar deals

based on Tokyo Stock Exchange data, the investors said.

The deal has the potential to "either reinforce or weaken

the progress made in corporate governance reforms," the

investors said in the letter. It was sent by the Asian Corporate

Governance Association (ACGA), which represents asset managers

in the region, and was signed by global institutional investors.

"Central to our concerns is the lack of full valuation

disclosure," the investors said. They called for the release of

all valuation models, tax assumptions and third-party appraisals

used to determine the offer price.

ACGA has had a series of calls with both companies about the

deal and a Toyota Industries ( TYIDF ) independent director was made

available for discussion, providing a level of access that is

relatively rare, ACGA Secretary General Amar Gill told Reuters.

TOYOTA INDUSTRIES SHARES ABOVE OFFER PRICE

Toyota ( TM ) said in a statement that it had engaged in "multiple

rounds of constructive dialogue" with ACGA and has sought to

provide thorough explanations of its position.

"The negotiations between the independent companies involved

in this transaction have been conducted in good faith through a

fair and independent process, with sufficient consideration

given to the interests of minority shareholders," it said.

"Should there be any matters that require disclosure in the

future, we will promptly make such announcements."

Shares of Toyota Industries ( TYIDF ) have been trading above the

offer price - they were at 16,620 yen on Thursday - suggesting

market participants believe Toyota ( TM ) may yet increase the price.

The investors also took issue with the planned transactions'

treatments of several Toyota ( TM ) group affiliates as independent

minority shareholders - which would mean that Toyota ( TM ) would

effectively need backing from only 42% of minority shareholders,

rather than a majority - to seal its bid.

They asked Toyota's ( TM ) board to clarify how it managed and

addressed the potential conflict of interest between Chairman

Akio Toyoda's direct investment and other shareholders.

The tender offer for Toyota Industries ( TYIDF ) was originally

expected to launch in December but it is now likely to begin in

February or later, Toyota ( TM ) said this month. It is awaiting

regulatory approval in some jurisdictions.