Citigroup not getting Nikko Cordial at 1,700 yen per share

April 4, 2007
By Ken Worsley

After Citigroup made an offer of 1,700 yen per share in its attempt to take control of troubled brokerage firm Nikko Cordial, Harris Associates LP and Orbis Investment Management Ltd. have put their shares on offer at 1,900 yen. Nikko Cordial shares closed at 1,695 today, perhaps demonstrating that the new offer is just a tad too high.

According to Masaki Iso at Yasuda Asset Management in Tokyo:

It’s a bargaining technique which is unprecedented and very political…The risk is that Citigroup will cancel the offer, which may hurt Nikko’s share price.

At Seeking Alpha, John Bethel counters by saying that any dent in share price caused by Citigroup walking away from the bid should be temporary, and that shareholders should be fine over the long term.

Filed Under Banking, M&A