GAM Says Honda Selling Stake in Yutaka Giken at 'Incomprehensibly Low Price' — Update
By Kosaku Narioka
Swiss asset manager GAM Investments has sent an open letter to Honda Motor criticizing the Japanese carmaker's planned sale of its controlling interest in parts maker Yutaka Giken at an "incomprehensibly low price."
GAM is upping the pressure on a planned takeover of the Honda subsidiary by Indian auto-parts maker Samvardhana Motherson International that it says significantly undervalues the Japanese company.
The asset manager previously sent a letter to the president of Yutaka, urging the Honda unit to either abandon the transaction or seek a significantly higher price.
Samvardhana Motherson said in late August that it planned to acquire an 81% stake in Yutaka for about 27 billion yen, equivalent to $177.4 million. Yutaka supported the tender offer and recommended that shareholders tender their shares.
As part of the deal, Samvardhana Motherson plans to start a tender offer to buy Yutaka shares for Y3,024 each from minority shareholders, valuing the company at about Y45 billion. The Indian company said it aimed to commence the tender offer in late January once it receives regulatory approvals.
Following the tender offer, Yutaka plans to buy back shares from Honda for Y1,470 apiece, using funds from Samvardhana Motherson if necessary, so that Honda's stake will fall to 19% from about 70%.
"This transaction raises serious governance concerns and potential material breaches of fiduciary responsibilities," Albert Saporta and Randel Freeman, co-heads of GAM Alternatives, said in the letter.
A Honda spokesman said the company received the letter but declined to comment on how it might respond.
Hamamatsu-based Yutaka is a profitable, cash-rich company that makes parts for exhaust systems and drive systems as well as brake discs and heat-management devices. It had about Y104 billion in net assets as of the end of September, with equity at 61% of assets.
GAM said it is a shareholder in Honda. GAM funds have held shares in Yutaka before Samvardhana Motherson announced its tender offer plan, it said.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
January 28, 2026 06:39 ET (11:39 GMT)
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