Shinsei Bank is considering becoming a holding company to boost its corporate value, external director Jun Makihara said in an interview Monday.
The move is designed to reflect the bank’s actual corporate value in its share price, by highlighting the profitability of competitive operations such as consumer finance.
While Shinsei’s consumer finance and other nonbank operations deliver a large proportion of its total revenue, they have been under the cover of flagship banking operations, Makihara said.
By shifting to a holding company, the performance of the nonbank operations will be presented to investors separately from the banking operations, lifting Shinsei shares, he said.
Shinsei also needs to consider taking some operations public and accepting outside capital, Makihara said.
The bank has come under the spotlight since online financial services firm SBI Holdings Inc. offered to buy Shinsei shares earlier this year at ¥2,000 apiece.
The purchase price is “lower than our fundamental value,” said Makihara, stressing that the bank’s shares are being undervalued by SBI.
SBI launched the tender offer when Shinsei’s share price was very low due to years of low interest rates and the fallout of the COVID-19 pandemic, Makihara added. If SBI wants to take control of Shinsei, it needs to offer a higher purchase price, he said.
Shinsei will seek shareholder approval for its takeover defense plan at a meeting on Nov. 25.
The bank has expressed its readiness to support the tender offer if SBI meets its requests, including raising the number of shares it plans to acquire. Shinsei has asked SBI for talks, but has yet to receive a response, according to Makihara.
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