Citigroup Bids $10.8 Billion for Nikko Cordial

 |  Includes: C, MFG, NIKOY
by: Steven Towns

Citigroup announced a $10.8 billion (¥1,350/share) bid for troubled Japanese brokerage Nikko Cordial, of which it currently owns a 4.9% stake. Citi is reportedly aiming for at least a 50% stake, as rival Mizuho, a 4.8% shareholder of Nikko, has already retreated from trying to make an acquisition. Shares of Nikko surged 14% to ¥1,340 today ahead of Citigroup's announcement. Citigroup-Nikko_Cordial-chart-03-05-07 Bloomberg reports this will be the second largest foreign acquisition of a Japanese company and the biggest by Citigroup since Charles Prince became CEO in 2003. Citi also owns a 49% stake of an investment banking joint venture with Nikko. Nikko faces a possible delisting by the Tokyo Stock Exchange, which is set to make its decision on March 9. Harris Associates recently became Nikko's biggest shareholder, increasing its ownership to 7.2% from 6.2%. The chief investment officer at Harris comments, "The business is worth over 2,000 yen, for sure, in the long term."

Sources: Bloomberg, Reuters
Commentary: Nikko Cordial's Roller Coaster Ride ContinuesCitigroup Has Decisions to Make Amidst Nikko Cordial UncertaintyCiti Got a Good Deal on the Online Bank 'Egg'
Stocks/ETFs to watch: Citigroup (NYSE:C), Nikko Cordial (OTC:NIKOY), Mizuho Financial Group (NYSE:MFG). Competitors: Mitsubishi UFJ Financial Group (NYSE:MTU), ABN Amro Holding N.V. (ABN), Nomura Holdings (NYSE:NMR). ETFs: iShares S&P Global Financial Index Fund (NYSEARCA:IXG), iShares Dow Jones US Financial Services (NYSEARCA:IYG), Financial Select Sector SPDR (NYSEARCA:XLF)

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.