Japan’s SBI Holdings increases stake in Shinsei Bank after public offering

By Satoshi Sugiyama and Makiko Yamazaki

TOKYO (Reuters) – Japanese online financial conglomerate SBI Holdings Inc said on Saturday it increased its stake in SBI Shinsei Bank to 53.74% by just 3.7 points through a public offering as a step towards privatizing the company. medium lender.

The completion of the public offering on Friday helps prepare for Shinsei’s expected delisting, allowing more flexibility in repaying 349 billion yen ($2.43 billion) in public funds that its predecessor bank received two decades ago in a government bailout, which still owns a 22.98% stake.

SBI Holdings said last month it would launch the public offer for Shinsei, with plans to pay 2,800 yen per share, for a total of 154.2 billion yen.

Shinsei shares, which closed at 2,807 yen on Friday, have remained above 2,800 yen since the announcement on speculation that some shareholders may demand a sweetened offer. The share price remains well below the 7,450 yen the government would need to recoup the money injected into Shinsei.

The lackluster results of the bidding suggest that the vast majority of minority shareholders appear to have decided the price was unfair, said Travis Lundy, an analyst at Quiddity Advisors who publishes on Smartkarma.

“Since the board ultimately decided to recommend a price that it had said was not recommended, it appears that many shareholders will be seeking a judicial appraisal of the fair price,” Lundy said.

“One can only hope that the attempt to rewrite the M&A rules will address such situations of coercive behavior by companies.”

According to Shinsei’s filing, its special committee suggested the bank was worth at least 3,000 yen a share, and an independent director opposed recommending shareholders tender their shares.

Shinsei will soon start procedures to squeeze out the remaining minority shareholders, except for the government. The steps include an extraordinary meeting of shareholders to vote on the share consolidation, which is expected to get the required two-thirds majority, with the approval of SBI and the government.

SBI aims to become the fourth largest banking group in Japan. He already owns the country’s largest online brokerage, an online bank and an asset manager, and has been buying shares in smaller lenders to create a national network.

($1 = 143.6800 yen)