Tokyo Stock Exchange President Taizo Nishimuro talks to the media on TSE's decision not to delist Nikko Cordial Corp. on March 12. KYODO PHOTO

The U.S. financial giant said it will "launch the all-cash tender offer as soon as practicable" in a joint statement issued with Nikko Cordial, Japan's third-largest brokerage, a day after the Tokyo Stock Exchange made a surprise decision not to delist the stock of the brokerage despite the involvement of the brokerage group's former management in accounting fraud.

The new price compares with Nikko Cordial's closing price on March 13 of ¥1,490 but is still lower than the ¥2,000 requested by investment funds holding large amounts of Nikko Cordial shares, raising uncertainty over whether they will cooperate with Citigroup's bid.

Citigroup spokeswoman Atsuko Yoshitsugu said the company has decided to raise the offer price as "uncertain factors over Nikko Cordial's listing have faded and the brokerage's future prospects have improved."

But she said Citigroup will not comment on the basis of its calculation of the offer price.

The U.S. group had said it plans to launch the friendly takeover bid soon.

Earlier this month, Citigroup, which already holds a roughly 5 percent stake in Nikko Cordial, said it will make the scandal-hit brokerage group a subsidiary through the tender offer to obtain a stake of at least 50 percent.

With the new offer price, obtaining a majority stake would cost Citigroup over ¥750 billion, higher than the previously estimated ¥600 billion.

The Japan Times Weekly: March 17, 2007
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