U.S. financial services giant Citigroup Inc., in the hunt to acquire Nikko Cordial Corp., said Tuesday it intends to raise its purchasing price to 1,700 yen per share from its initial offer of 1,350 yen.

Citigroup's announcement came a day after the Tokyo Stock Exchange decided not to delist Nikko Cordial for accounting fraud -- a move that may have saved the brokerage's reputation but jeopardized Citigroup's bid to purchase its shares for a price that many investors claimed was too low.

"Citigroup revised the price for public tender offer since we decided that the prospect of Nikko Cordial improved because it was removed from the monitoring post in the TSE, Osaka Securities Exchange and Nagoya Stock Exchange," Citigroup said in a statement.

The decision was approved by the board of directors of both Citigroup and Nikko Cordial earlier Tuesday. Citigroup said it will launch the tender offer in the near future after preparation work is completed.

However, it is still unclear whether the public tender offer will be successful as some U.S. investment funds that are Nikko Cordial's major shareholders have claimed that the company is worth at least 2,000 yen per share.

The outcome may also depend on how individual shareholders respond to Citigroup's new offer.

If Nikko Cordial had been delisted -- as was widely speculated until the TSE made the announcement Monday -- the brokerage's stock price would have probably dropped, encouraging shareholders to respond to Citigroup's public tender offer at 1,350 yen.

But the TSE's decision caused Nikko Cordial's stock price to rise Tuesday, surging briefly above 1,500 yen at one point. The shares were trading at 1,490 yen, or 86 yen higher than the day before, when trading ended.

On Monday, the TSE said it decided not to remove Nikko Cordial from the market because it could not confirm whether the brokerage's falsification of its financial statements was systematic.

An outside investigative panel has said Nikko Cordial's former executives systematically padded profits.

The Financial Services Agency fined the brokerage 500 million yen in January, the largest fine it has ever imposed, after Nikko Cordial admitted in December to having falsified financial statements in fiscal 2004.

The TSE moved Nikko Cordial stock to the monitoring post category on Dec. 18, when the accounting irregularities surfaced.