Toyota Motor Regulatory News (TYT)

28 Jul 2008 09:30



[Translation]

July 28, 2008

To Whom It May Concern:

Company Name: Toyota Motor Corporation

Name and Title of Representative:

Katsuaki Watanabe, President 

(Code Number: 7203

Securities Exchanges throughout Japan)

Name and Title of Contact Person:

Takuo Sasaki

General Manager, Accounting Division

(Telephone Number: 0565-28-2121)

Notice regarding Conversion of Central Motor Co., Ltd. into a Wholly-owned Subsidiary by 

TOYOTA MOTOR CORPORATION through Simple Share Exchange

Tokyo - TOYOTA MOTOR CORPORATION ("TMC") announced today that TMC and Central Motor Co., Ltd. ("Central Motor") have signed a share exchange agreement by which Central Motor shall become a wholly-owned subsidiary of TMC and TMC shall become the parent company of Central Motor as described below ("the Share Exchange"), each company having adopted a resolution approving the Share Exchange at a meeting of its board of directors held today. The effective date of the share exchange agreement will be October 1, 2008.

The Share Exchange is subject to the approval of the share exchange agreement by shareholders at the extraordinary general meeting of shareholders of Central Motor scheduled to be held on September 3, 2008, after which the Share Exchange will take effect on October 1, 2008. TMC is not required to obtain approval from shareholders at its general shareholders' meeting, as TMC will implement the Share Exchange through the process of "simple share exchange" under Article 796, Paragraph 3 of the Corporation Act of Japan.

Please note that some of the disclosure items and contents are omitted herein, because the Share Exchange is a "simple share exchange" to convert a consolidated subsidiary into a wholly-owned subsidiary.

1. Purpose of converting Central Motor into a wholly-owned subsidiary through the Share Exchange 

2. Outline of the Share Exchange

(1) Timeline

(Note 1) TMC will implement the Share Exchange by means of a "simple share exchange" under Article 796,

Paragraph 3 of the Corporation Act which does not require approval by shareholders at its general

shareholders' meeting. 

(Note 2) The scheduled date of the Share Exchange is subject to change by mutual agreement between TMC and

Central Motor.

(2) Share Exchange Ratio

(Note 1) Share Exchange Ratio

0.23 shares of TMC common stock will be delivered in exchange for one share of Central Motor stock in the Share Exchange. However, TMC common stock will not be delivered in the Share Exchange in exchange for the 6,680,000 shares of Central Motor stock which are held by TMC .

(Note 2) Treatment of Shares less than One Unit 

Shareholders who will hold shares less than one unit of TMC stock (less than 100 shares) as a result of the Share Exchange will be unable to sell such shares on the securities exchanges. The shareholders who will hold shares less than one unit of TMC stock can utilize the "system for purchase of shares less than one unit" (sale of shares less than 100 shares).

(Note 3) Treatment of Fractions of less than One Share

If the number of the shares that shall be delivered to any shareholder as a result of the Share Exchange includes a fraction of less than one share, a cash amount in proportion to the fractions attributed to the Share Exchange will be paid to such shareholder in accordance with Article 234 of the Corporation Act.

(3) Basis for Calculation of the Share Exchange Ratio

In order to ensure the fairness and appropriateness of the share exchange ratio, TMC and Central Motor selected Nomura Securities Co., Ltd. ("Nomura") and Seiei Audit & Co. ("Seiei") as their respective third party institution to perform calculation of the share exchange ratio.

In calculating the value per share, Nomura applied an Average Market Price Analysis to TMC stock and a Comparable Companies Analysis as well as a DCF (Discounted Cash Flow) Analysis to Central Motor stock; while Seiei applied a Market Price Average Analysis to TMC stock, and a Comparable Companies Analysis, DCF Analysis and Market Value Based Net Asset Analysis to Central Motor stock.

As a result of subsequent discussion and negotiation between TMC and Central Motor which took into account the results of the calculations referred to above, each company approved the share exchange ratio at its board of directors meeting held on July 28, 2008 and signed the share exchange agreement on the same day. The above-mentioned share exchange ratio is subject to change by mutual agreement between TMC and Central Motor in the event of a substantial change in the conditions on which the calculations are based.

(4) Wholly-owned Subsidiary's Treatment of Stock Acquisition Rights and Bonds with Stock Acquisition Right 

Central Motor has not issued any stock acquisition rights or bonds with stock acquisition right.

3. Overview of Parties to Stock Exchange (as of March 31, 2008) 

4. Information on the Parent Company after the Share Exchange