Harris Associates turn down improved Nikko offer

22 March 2007

Harris Associates has turned down Citigroup's improved $13.4 billion offer for its stake in Japanese brokerage Nikko Cordial, according to its chief investment officer.

David Herro of Harris, which is the largest shareholder in Nikko, has told Bloomberg that the bank currently has no intention "at this stage" to accept the offer of $14.47 per share.

He said: "We think a fair price is above 2,000 yen ($16.9) given that Citigroup is going to be managing it and Nikko avoided delisting.''

Harris is the first of the broker's shareholders - including Mackenzie, Southeastern Asset Management and Orbis - who had lobbied for a higher share valuation to publicly reject Citigroup's higher bid, which is due to close on April 26th.

Earlier this week Japanese bank Mizuho stated that it intends to sell its 4.8 per cent share to Citigroup, but even if the deal goes through it will still leave the bank chasing just over 40 per cent share of its partner Nikko if it is to achieve its aim of securing a controlling share.

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