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Citigroup launches tender offer for Nikko Cordial Corp

Citigroup Inc launched a tender offer for scandal-tainted Nikko Cordial Corp yesterday, a spokeswoman for the US bank said, two days after raising its offer price by 26 percent to dispel shareholder opposition.

Citigroup, which owned a 4.9 percent stake in Japan's third-largest brokerage at the end of last year, will conduct the tender offer for the remaining shares through April 26 in a deal worth up to US$13.35 billion, the company said in a statement.

Citigroup initiated the offer for Nikko Cordial on the Tokyo Stock Exchange, said Mika Nemoto, a spokeswoman for the company's Japan unit.

The purchase, if realized, would be the biggest foreign acquisition of a Japanese securities company and is expected to strengthen Citigroup's foothold for selling mutual funds and other services in the world's second-largest economy.

On Tuesday, the boards of the two companies agreed to raise the offer price for Nikko Cordial 26 percent to ¥1,700 (US$14.49) a share after the Japanese brokerage's largest shareholders rejected the initial price of ¥1,350 a share as too low.

Douglas Peterson, the head of Citigroup's Japanese operations, said on Wednesday the bank would not raise that offer further, calling the bid price "fair and firm."

Citigroup also raised the offer price after the Tokyo Stock Exchange announced it would keep Nikko Cordial's shares listed despite an accounting scandal last year.

Nikko Cordial's shares finished trading yesterday down 0.29 percent at ¥1,685.

The Japanese brokerage, the country's third-largest, was fined ¥500 million yen on charges of falsifying financial statements, the largest fine ever levied by Japan's financial authorities.

Separately, Citigroup aims to expand its staffing in China by one-third this year as it ramps up business in the fast-growing loan market, China's state press reported yesterday.

Citigroup plans to add about 1,000 workers in China this year, boosting the number of staff to 4,000, the lender's China chief, Richard Stanley, told the China Daily.
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