Citi Says Bid for Nikko is Fair; Citi Also Eying Growth in China

Nikko Cordial's ordinary shares lost 0.3% to ¥1,685, coming within one yen intra-day of the ¥1,700 bid Citigroup announced Tuesday. Individual shareholders seem to have been locking in profits following a news conference where Citi-Japan's CEO said, "Our price is full and it's fair and it's firm. It will not be raised." Three of Nikko's four largest shareholders have previously said Nikko is worth more than ¥2,000/share, but they have not commented on Citi's latest bid, which is 26% higher than its original bid of ¥1,350/share. Nikko has approved Citi's bid, which expires on April 26. Separately, The Wall Street Journal reports Citi has plans to increase its staff in China by 25% to 4,000, as it "plans to open new branches and subsidiaries, as many as possible, this year, though it will rely on the China Bank Regulatory Commission's approval," according to Citi-China's CEO. Citi also wants to purchase a larger stake in Pudong Development Bank, eventually up to the 19.9% limit. It currently owns a 3.78% stake.

Sources: Press release, Reuters, The Wall Street Journal
Commentary: Citi Boosts Bid for Nikko Cordial by 26% • Nikko Cordial Keeps TSE Listing: Bad News for Citigroup? • Citi's Bid for Nikko Could Be Stalled as Tokyo Exchange Keeps Nikko's Listing
Stocks/ETFs to watch: Citigroup (C), Nikko Cordial (NIKOY), Mizuho Financial Group (MFG).
Competitors: Mitsubishi UFJ Financial Group (MTU), ABN Amro Holding N.V. (ABN), Nomura Holdings (NMR). ETFs: iShares S&P Global Financial Index Fund (IXG), iShares Dow Jones US Financial Services (IYG), Financial Select Sector SPDR (XLF)

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