Mizuho to sell Nikko stake to Citigroup?

16 March 2007

Japanese bank Mizuho intends to sell its shares in brokerage Nikko Cordial to Citigroup, according to reports in Japan.

Mizuho's proposed sale of its 4.8 per cent stake enhances the chances of success for Citigroup's $14 billion buyout bid for scandal-hit Nikko.

The tender commenced on Thursday and ends on April 26th, and it is thought that Mizuho's decision is informed by a desire to foster ties with Citigroup in the hope that it will help in the Japanese bank's ambitions to enter the US securities market.

Earlier this week, Citigroup had upped its bid from the initial offer of $10.8 billion after the Tokyo Stock Exchange decided not to delist the company following an accounting scandal in December of last year.

However, the deal still hinges on whether a coterie of four American banks which own a 25 per cent share of Nikko between them decide to accept Citigroup's improved offer.

The four investment banks are Mackenzie, Southeastern Asset Management, Harris Associates and Orbis, which own stakes of 7.5 per cent, 6.6 per cent, 7.5 per cent and 6.9 per cent respectively.

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