Two overseas investment funds, which held a combined 12 percent stake in Nikko Cordial Corp. as of March 31, plan to reject U.S. financial giant Citigroup Inc.'s public tender offer for Japan's No. 3 brokerage, sources said Thursday.
Despite the decision, Citigroup's buyout, which expired Thursday, was widely seen as ending successfully because major domestic shareholders of Nikko Cordial have expressed readiness to sell their stakes in the brokerage.
The investment funds are Bermuda-based Orbis Investment Management Ltd., which held a 6.9 percent stake in the brokerage, and Harris Associates L.P. of the United States, which held 4.97 percent.
The two funds have said Citigroup's tender offer price of 1,700 yen per share is too low and called for a price hike to at least 2,000 yen.
Citigroup is trying to make Nikko Cordial, which has been embroiled in an accounting fraud scandal, a subsidiary through the tender offer.