The unusual takeover battle for the ailing lender UFJ Holdings is shaking up Japan's ultraconservative financial industry, but many UFJ shareholders are wondering if anything has really changed. \nThe Sumitomo Mitsui Financial Group disregarded the unwritten rules of Japan's chummy banking world last month when it began an unsolicited bid for UFJ after the bank had already begun merger talks with the larger Mitsubishi Tokyo Financial Group. \nThe prospect of a bidding war -- a first for Japan -- fueled hopes among UFJ shareholders that the backroom deal-making that characterized many previous mergers would be replaced by open competition where the interests of shareholders were given priority. But a month into the first takeover battle for a Japanese bank, shareholders complain that they have little information to judge which bid would offer the best value. Mitsubishi Tokyo, UFJ's chosen partner, has made no public offer. \n"It looks like UFJ has basically decided to merge with Mitsubishi Tokyo, but they haven't made it clear why. They haven't explained things to minor shareholders and seem to be completely ignoring us," said Shinichi Haneda, a manager of a Japanese stock fund that includes UFJ shares at the AIG Global Investment Management Corp. \nHaneda said he had expressed his displeasure to UFJ. \nIn late August, Sumitomo offered about US$29 billion in stock, but its bid came with a caveat -- it could be changed if Sumitomo found any surprises in UFJ's books. \nBut shareholders are not likely to receive many more details on Mitsubishi Tokyo's proposal any time soon. The bank likely will not announce its offer price until after UFJ closes its books for the quarter ending this month, said a Mitsubishi Tokyo executive. But there is even a possibility its bid might not be disclosed until after UFJ reports earnings and, more importantly, the amount of its bad loans, for the fiscal year ending March next year, the executive said. \nBecause of UFJ's bad-loan troubles, Mitsubishi Tokyo says it has an obligation to its shareholders to take a close look at UFJ's books before making an offer. UFJ had some ?3.95 trillion (US$36 billion) in bad loans as of the end of March, 8.5 percent of its loan portfolio, and the most among Japan's top banks. \n"We think it's imperative to conduct thorough due diligence before determining the merger ratio," a Mitsubishi Tokyo spokesman, Kohei Tsushima, said. \nFor its part, UFJ has been trying to convince shareholders that its board is acting on their behalf, though it too has declined to disclose how much Mitsubishi Tokyo might offer. UFJ placed advertisements in The Wall Street Journal, The Financial Times and Japan's leading financial newspaper, The Nihon Keizai Shimbun, on Tuesday stressing that its board is evaluating both proposals with shareholders interests in mind. \n"The board confirms that it is carefully examining SMFG's proposal with its external advisers, including its financial advisers who are reviewing the proposal from a shareholder's perspective," said the advertisement, which was addressed to shareholders and signed by the chief executive of UFJ Holdings, Ryosuke Tamakoshi. \nUFJ concedes that it has received many complaints from shareholders -- primarily overseas investors -- who want more details on Mitsubishi Tokyo's offer, but the bank said it does not know when it will be able to do that.
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