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Chicago-based Harris Associates has rejected Citigroup's (NYSE:C) latest offer for Nikko Cordial (OTC:NIKOY) as being too low. From the linked Bloomberg report:

Harris, which owns about 7.5 percent in Nikko, has no plan "at this stage,'' to accept Citigroup's bid of 1,700 yen ($14.47) per share, David Herro, chief investment officer at the Chicago- based fund, said in a telephone interview. Nikko is worth at least 2,000 yen a share, he said.

How this impacts Citi's takeover attempt will play out. Just the other day Mizuho Financial declared it would sell its Nikko stake to Citigroup. The view was that Mizuho's announcement swung the momentum in Citi's favor.

Whether Harris Associates' announcement swings the sentiment in the opposite direction remains to be seen. And will a second, third and fourth shoe drop? By that I mean Nikko's three other major shareholders -- Orbis Investment, Southeastern Asset Management and Mackenzie/Cundill. Along with Harris, those three own more than a quarter of Nikko shares. Foreign (non-US) shareholders own roughly 60% of the company.

Back to the Bloomberg report:

"Harris's decision as the major shareholder may impact what other investors do,'' said Yuri Yoshida, a Tokyo-based analyst at Standard & Poor's, which is reviewing Nikko's credit ratings for a possible upgrade. "We are monitoring closely whether this tender offer succeeds.''

And another bit from David Herro:

"We are not going to tender at this time,'' Herro said. "We think a fair price is above 2,000 yen given that Citigroup is going to be managing it and Nikko avoided delisting.''

I haven't made up my mind about whether or not to tender my shares (I own the ADRs).

Source: Nikko Cordial: Largest Shareholder Rejects Citigroup's Latest Offer