Shinsei Bank said Friday it will launch defensive measures against an unsolicited takeover bid by Japanese online financial firm SBI Holdings Inc. and hold an extraordinary shareholders meeting to seek approval for the plan.
The decision by the bank's board marks a further flare-up in tensions, effectively making a tender offer launched a week ago by SBI hostile.
As part of its defense, Shinsei plans to issue new shares to existing shareholders to dilute SBI's shareholdings, a tactic known as a poison pill to foil the online financial firm's abrupt takeover attempt.
Shinsei said its board will set a date for the extraordinary shareholders' meeting, adding that it is seeking SBI's response to questions regarding the purpose of the takeover bid and ways to boost the value of the bank's shares.
In the tender offer through Oct. 25, SBI is seeking to increase its stake in Shinsei to as high as 48% from the current 20%. It is offering ¥2,000 ($18) per share, meaning that the takeover could reach ¥116.4 billion.
Shinsei shares ended at ¥1,896 on Friday.
SBI, led by CEO Yoshitaka Kitao, has blamed Shinsei's current management for its failure to improve profitability and repay public funds.
Shinsei, meanwhile, has taken issue with the bid, which was made without prior consultation, and pointed out that SBI gave inaccurate or insufficient explanations. It has argued SBI suddenly launched the bid to raise its stake in the bank, contrary to previous assurances that the financial group did not intend to step up share buying.
Shinsei has also sounded out Sony Group Corp. about the possibility of making a counteroffer, people close to the matter said earlier.
Shinsei is known in Japan for its consumer loans and credit card businesses. It received around ¥370 billion in public funds after its predecessor's collapse in 1998 and repaying it remains a challenge. The Japanese government owns around 20% of the bank.
SBI's envisaged takeover comes as Prime Minister Yoshihide Suga, who has underlined the need to reorganize regional banks, is stepping down as his term ends later this month.
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