Shinsei Bank is prepared to oppose a tender offer by online financial group SBI Holdings Inc., a move that would force SBI into a rare hostile takeover bid in Japan’s banking sector, sources familiar with the matter has said.
Shinsei Bank’s independent external directors on Monday advised against a proposed acquisition by SBI.
Shinsei has taken issue with the bid over concerns that shareholders originally opposed to the tender may be forced to sell their shares to avoid becoming minority shareholders in the bank once it becomes a subsidiary of SBI.
Based on the advice of a council of five outside directors, the bank’s board of director is expected to make a formal decision to oppose the takeover at its meeting on Oct. 18 at the earliest, the sources said.
SBI is seeking to raise its stake in Shinsei from the current 20% to 48% through a tender offer launched in early September.
Shinsei, which has decided to prepare defense measures against the takeover bid, is making arrangements to take the matter to an extraordinary shareholders’ meeting in November.
The focus of the shareholders’ meeting will be on whether SBI, which has criticized Shinsei’s defense measures as “management protecting its own interests,” can secure the support of shareholders.
It is also uncertain whether Shinsei Bank shareholders will approve the takeover defense measure, given that the bank has long remained unable to repay ¥350 billion in public funds injected in the past due to the protracted weakness of its stock price.
Shinsei will continue discussions throughout the week and finalize a growth strategy to be presented to the shareholders, the sources said.
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