Mizuho Financial To Increase Stake In Nikko Cordial?

When I first mentioned Nikko Cordial (NIKOY) in May 2005, I speculated that the brokerage company could be a takeover target, specifically by the Japanese behemoth Mizuho Financial (MFG).

Yesterday I read the following in The Lex Column in the Financial Times:

Mizuho may further broaden its securities exposure if, as local reports indicate, it injects additional funds – and possibly increases its stake – in Nikko Cordial, Japan’s third-largest brokerage.

Japan's corporate culture is changing -- painfully slow it seems. But it makes sense for Mizuho to buy Nikko Cordial. With the company recently trading lower on its troubles with government regulators, this may be an opportune time for Mizuho to add to its Nikko holding.

NIKOY 1-yr chart

Comments

[Steven Towns:]

Nice call John. This is an excellent time for Mizuho to make an investment in Nikko Cordial. Domestic trading and i-banking activity is obviously competitive in JP (with an ever greater importance on overseas deals even as the domestic market is viewed as robust for deal making, esp. ahead of the allowance of the triangular merger system from May) and any scale / market share Mizuho can acquire on the cheap is a bonus. One thing I'd be considered about is a loss of credibility / image at Nikko that would hurt its competitiveness.

2007 Jan 11 08:56 AM