UPDATE:SMFG,MUFG,Mizuho In Round 2 Nikko Cordial Bid-Sources
April 21 2009 - 12:15AM
Dow Jones News
Japan's three megabanks Monday submitted offers to buy Nikko
Cordial Securities Inc. in the second round of bidding, people
familiar with the matter said Tuesday.
Sumitomo Mitsui Financial Group Inc. (8316.TO), Mitsubishi UFJ
Financial Group Inc. (8306.TO) and Mizuho Financial Group Inc.
(8411.TO) are bidding for the unit put up for sale by Citigroup
Inc. (C), they said.
The Nikkei reported Tuesday morning that the price for Nikko
Cordial Securities could reach Y400-500 billion.
MUFG, Japan's largest banking group, is still the leading
candidate, but SMFG, the third largest by assets, has emerged as a
leading contender, one person said.
Mizuho is considered least likely to win the bid given its
currently weak financial capacity for investment, the people
said.
Citigroup has put Nikko Cordial on the market because, like
several major western banks, the financial meltdown is forcing it
to sell off international assets once seen as central to
growth.
For the Japanese megabanks, buying one of the country's leading
brokerages would give a major boost to their retail brokerage
business aspirations.
Last month, MUFG said it will merge brokerage unit Mitsubishi
UFJ Securities, which is strong in the retail sector, with Morgan
Stanley Japan by the end of March 2010.
SMFG has a close relationship with Daiwa Securities Group Inc.
(8601.TO) through wholesale brokerage venture Daiwa Securities SMBC
Co.; but in the retail sector, it only has the relatively small
SMBC Friend Securities Co.
SMFG said earlier this month it intends to strengthen its
capital base by raising up to Y800 billion through issuing common
shares. The group said the capital boost is part of its "new
business strategy," but declined comment specifically on what the
cash was for.
Meanwhile, Mizuho, Japan's second biggest bank, said last month
its brokerage unit, Mizuho Securities Co., will merge with Shinko
Securities Co. (8606.TO) on May 7. Mizuho has delayed the deal a
few times due in part to uncertainty surrounding the financial
crisis.
-By Atsuko Fukase, Dow Jones Newswires; 813-6895-7567;
atsuko.fukase@dowjones.com