Sumitomo Mitsui Financial Group Inc. said Friday it has extended to June 30 the period in which its proposal to UFJ Holdings Inc. that the firms merge via a one-to-one share exchange ratio will remain valid.

Sumitomo Mitsui, the parent of Sumitomo Mitsui Banking Corp., said it wrote to UFJ earlier in the day communicating its decision to extend the validity period from the initial deadline of Friday.

That deadline was proposed on the assumption that Sumitomo Mitsui would be ready to carry out a huge injection into the depleted capital base of UFJ by Sept. 30.

In August, Sumitomo Mitsui proposed integrating the two banking groups on a one-to-one share ratio.

But UFJ has clung to its decision of integrating its management with Mitsubishi Tokyo Financial Group Inc., which has pledged to merge with UFJ in October 2005, contingent on approval at a UFJ shareholders’ general meeting slated for June.

On Sept. 10, Mitsubishi Tokyo channeled 700 billion yen into UFJ Bank, the core bank of UFJ Holdings, to bolster the bank’s capital base and secure its chances of integrating with the UFJ group through the purchase of new preferred shares issued by UFJ Bank.

The payment was made earlier than the original deadline of Sept. 29 in an attempt to thwart a possible hostile takeover bid for UFJ by Sumitomo Mitsui.

In a Sept. 10 statement, however, Sumitomo Mitsui suggested it may wage a proxy fight with Mitsubishi Tokyo at the upcoming UFJ Holdings shareholders’ meeting in June.

The statement said, “We will consider specific measures, including talking directly to UFJ shareholders, to realize an integration with the UFJ group.”

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.