SBI Holdings Inc. said Friday it will extend its unsolicited tender offer for Shinsei Bank by one month if the bank meets conditions set for it after a hostile takeover bid by the major online financial group raised tensions between the parties.
SBI demanded Shinsei not attempt to buy time by posing “low-priority” questions, and that it hold an extraordinary shareholders’ meeting as soon as possible and in an equitable manner.
If these conditions are met, the tender offer period will be pushed to Nov. 24, rather than until the current Oct. 25, SBI said in response to Shinsei’s earlier request for an extension to Dec. 8.
Last week, Shinsei launched an attempt to fend off the takeover by coming up with a plan to dilute SBI’s holdings through the issuance of shares to other existing shareholders. Shinsei is seeking shareholder approval for the move.
SBI hopes to raise its stake in Shinsei from the current 20% to as high as 48% through a tender offer launched in early September, offering ¥2,000 ($18) a share, sharply higher than Shinsei’s current share price which was ¥1,879 at the close of the market on Friday.
SBI said Shinsei should hold the extraordinary shareholders’ meeting no later than Nov. 17 and the financial group should be allowed to exercise its voting rights. If Shinsei’s defense measure is voted down, SBI will extend the duration of the tender offer.
The dilution attempt drew immediate criticism from SBI, which said it would be a negative for all Shinsei shareholders. SBI said it has already provided sufficient information to allow shareholders to make an educated decision on whether to sell their shares in the tender offer.
Responding to questions by Shinsei, SBI said Friday the planned takeover, which would replace some or all of the current Shinsei management, will increase Shinsei’s value and enable it to repay massive sums of public money it had earlier received.
In another round of back and forth, SBI urged Shinsei to explain why it has failed to repay public funds and to provide evidence its road map to improvements in enterprise value is likely to deliver better results than SBI’s.
The government injected around ¥370 billion into Shinsei following its predecessor’s collapse in 1998. Focus has now shifted to whether the government, which owns around 20% of the bank, will tender its shares.
Led by CEO Yoshitaka Kitao, SBI has an ambitious goal to become Japan’s fourth megabank after MUFG Bank, Sumitomo Mitsui Banking Corp. and Mizuho Bank. He also sees the need for regional banks to reorganize.
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