Citigroup ups offer for Nikko Cordial by 26 per cent

Our Corporate Bureau
13 March 2007

Mumbai: Citigroup has raised its offer price for Japanese brokerage Nikko Cordial Corporation by 26 per cent to $13.4 billion following Tokyo Stock Exchange's decision not to revoke the brokerage's listing.

The exchange's surprise ruling came as a blow to Citigroup's move to use its leverage against a group of large North American shareholders who had opposed the bank's initial offer as too low.

Citigroup says it's now willing to pay more for Nikko, its biggest Asian acquisition target, as it tries to expand into Japan's asset management market.

A statement issued by Citigroup said it planned to make a fresh offer at ¥1,700 a share, against the initial ¥1,350 it offered last week.

The new offer which is a premium of 14 per cent to Nikko's last closing price, values Nikko at roughly ¥1.578 trillion ($13.43 billion).

The latest offer still falls short of the ¥2,000 a share demanded by most of the funds. Even before the stock exchange's ruling, a group of US and Canadian investment funds that own about 25 per cent of Nikko had complained Citigroup's first offer undervalued the firm by a third or more.