Nikko Cordial's ordinary shares traded in a narrow range today (¥1,684 to ¥1,691), following a report in the morning edition of the Nikkei Shimbun saying Mizuho has decided to sell its entire 4.8% stake in Nikko to Citigroup. Nikko closed up 0.1% to ¥1,687, but still under Citigroup's ¥1,700/share bid. Mizuho's stake has been viewed as a key determinant in whether Citi's bid will succeed. The Nikkei didn't cite any sources, but said Mizuho is cooperating to help speed up Citi's tender offer, as it aims to strengthen its operational relationship with Citi. There has yet to be any word from Nikko's four largest shareholders (since Citi raised its bid to ¥1,700, from ¥1,350), three of which previously said Nikko is worth more than ¥2,000/share. The Nikkei report suggested Mizuho and also Dai-Ichi Life's (1.4% stake) expected acceptance could influence the four overseas funds, which own a combined 25+ percent stake. Mizuho is seen earning around ¥30 billion from a sale price of ¥80 billion, according to the Nikkei, but its shares lost 2.3% today.
Sources: Nikkei Shimbun, Reuters, Forbes XFN-Asia newswire
Commentary: Nikko Cordial: Mizuho Financial Plans to Sell Entire Stake to Citigroup • Citi Says Bid for Nikko is Fair; Citi Also Eying Growth in China • Citi Boosts Bid for Nikko Cordial by 26%
Stocks/ETFs to watch: Citigroup (C), Nikko Cordial (OTC: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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