A planned management buyout of auto parts maker Pacific Industrial has prompted a backlash from one of its largest investors, adding pressure on the Tokyo Stock Exchange to provide more protection for minority shareholders in such deals.

The management-led offer to take the Toyota supplier private at ¥2,050 per share is too low and highlights shortfalls in Japan’s MBO regulations, according to Drew Edwards, portfolio manager and head of Japan equity at U.S.-based investment firm GMO.

"The process they’re using isn’t fair, and they haven’t reached a fair price as a result of that,” said Edwards, whose fund holds around 4% of voting shares in the Japanese company. Pacific Industrial’s market value is ¥163 billion ($1.1 billion), and Toyota is its biggest customer, according to Bloomberg-compiled data.