Citigroup Inc. (C) Increases Offer for Cordial
Citigroup Inc. (C, 50.36) said Tuesday that it would increase its offer for Japanese broker Nikko Cordial. The banking giant said it would launch a tender offer for 100% of Nikko Cordial's shares at 1700 yen per share. That's up from a 1350 yen per share offer put on the table last week.
The boards of both companies have approved the launch of Citigroup's tender offer at this price, and the all-cash offer is expected to be made as soon as is practicable.
Citigroup revised the price for its offer following the decision of the Tokyo Stock Exchange, Osaka Securities Exchange and Nagoya Stock Exchange to return Nikko Cordial's shares to normal trading status, an action it says significantly improves Nikko Cordial's outlook and prospects. An accounting scandal had raised the risk of the company being delisted.
Some large shareholders, incidentally, had been expressing some resistance to the original offer price, saying it was way too low. The increased offer should be a placating factor of sorts.
If successful, the Citigroup deal would be the largest takeover by a foreign firm in Japan. Citigroup already owns a 4.9% stake in Nikko, and the two firms currently have an investment banking joint venture.
The increase in Citigroup's offer doesn't change our impression of the deal. We see it as a step toward generating stronger growth. It will raise Citigroup's exposure in Japan for retail investors who are increasingly embracing the return prospects of other investment vehicles outside traditional savings accounts.
--Christine Marie Nielsen, Briefing.com
The boards of both companies have approved the launch of Citigroup's tender offer at this price, and the all-cash offer is expected to be made as soon as is practicable.
Citigroup revised the price for its offer following the decision of the Tokyo Stock Exchange, Osaka Securities Exchange and Nagoya Stock Exchange to return Nikko Cordial's shares to normal trading status, an action it says significantly improves Nikko Cordial's outlook and prospects. An accounting scandal had raised the risk of the company being delisted.
Some large shareholders, incidentally, had been expressing some resistance to the original offer price, saying it was way too low. The increased offer should be a placating factor of sorts.
If successful, the Citigroup deal would be the largest takeover by a foreign firm in Japan. Citigroup already owns a 4.9% stake in Nikko, and the two firms currently have an investment banking joint venture.
The increase in Citigroup's offer doesn't change our impression of the deal. We see it as a step toward generating stronger growth. It will raise Citigroup's exposure in Japan for retail investors who are increasingly embracing the return prospects of other investment vehicles outside traditional savings accounts.
--Christine Marie Nielsen, Briefing.com
Labels: C, Citigroup Inc., Cordial
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