Big Nikko Shareholder Signals Unwillingness to Accept Citi's Bid

Orbis Investment Management, a 5.8% Nikko Cordial shareholder and among four non-Japanese funds owning a 25+ percent stake, placed a sell order today for 56.5 million shares on the Tokyo Stock Exchange at ¥1,900, or 11.8% above Citigroup's raised bid price of ¥1,700. Citi has already publicly stated its ¥1,700 bid, valuing Nikko at approximately $13.4 billion, is final (expiring Apr. 26). Leading overseas shareholders however, continue to voice their dissatisfaction, with some claiming Nikko is worth at least ¥2,000. Bloomberg reports sell orders today at ¥1,900 totaled 71 million shares, according to Instinet Japan. In a statement, Orbis said the sell orders "will be visible to the market in the order book" of the TSE, adding that "This open format permits the marketplace to decide what the shares are worth." A Tokyo-based fund manager commented, "It will be an incentive for Citigroup to raise the offer as it can monitor how many shareholders will be willing to sell at 1,900 yen." Separately, the Nikkei English News (not citing a source) reported a growing list of Japanese corporate shareholders appear willing to sell their stakes in Nikko to Citi at its raised offer price. Nikko's shares gained one yen (+0.06%) to ¥1,686.

Sources: Bloomberg, Reuters, Forbes XFN newswire
Commentary: Nikko Cordial: 6.6% Shareholder Southeastern Says Citi Bid Too Low • Citi Says Bid for Nikko is Fair; Citi Also Eying Growth in China • Mizuho Cuts FY Guidance; Plans to Accept Citi's Offer for Nikko
Stocks/ETFs to watch: Citigroup (C), Nikko Cordial (NIKOY) (JP: 8603), Mizuho Financial Group (MFG). Competitors: Mitsubishi UFJ Financial Group (MTU), 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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