TOKYO -- Japanese financial group SBI Holdings said on Thursday it has decided to increase its stake in Shinsei Bank through a takeover bid. SBI already holds a stake of more than 19% in the bank. Depending on Shinsei Bank's response, the tender offer could turn hostile
SBI will begin buying shares on Nov. 1 and plans to invest about 110 billion yen ($1 billion), aiming to raise its stake to 48%.
Shinsei Bank closed Thursday's trading session at 1,440 yen, for a market capitalization of 373 billion yen.
Shinsei Bank released a statement after SBI's announcement, saying it had not received any notice from SBI regarding the tender offer. "The tender offer is not something that has been approved by our board," the statement went on to say, adding that the company will respond with once it has reviewed the information.
SBI has set the tender offer price at 2,000 yen per share, which is 39% higher than its Thursday closing price. SBI has been acquiring Shinsei Bank's shares on the open market since January last year, ostensibly as a pure investment.
On Thursday, Shinsei Bank released a statement saying it had not received any notice from SBI regarding the tender offer. "The tender offer is not something that has been approved by our board," the statement went on to say, adding that the company will respond with its opinions once it has reviewed all the information.
SBI President and CEO Yoshitaka Kitao has said in the past that "it is important to cover all kinds of financial services."
Shinsei Bank is known for its consumer and corporate loan businesses, which are areas that SBI seeks to strengthen. Through the tender offer, SBI aims to reinforce its alliance with Shinsei and enhance synergies between the two.
In a statement, SBI also said the tender offer is meant to ensure that it has "the voting rights to enable a change [among] all or part of Shinsei Bank's officers."
Shinsei Bank has been working with SBI in areas such as promoting regional revitalization in Japan, an initiative led by SBI since August 2020. However, relations soured between the two after Shinsei Bank announced in January a tie-up with online brokerage Monex Securities, a rival of SBI's in the financial instrument intermediary business.
At Shinsei Bank's annual shareholders meeting in June, SBI voted against the company's president and CEO, Hideyuki Kudo, as well as a few other directors.
In Japan, when a company acquires a stake of 20% or more in a bank, becoming a major shareholder, the transaction requires approval from the Financial Services Agency. On Thursday, the FSA gave SBI the green light for the purchase.
SBI is already a major shareholder in other banks, including Fukushima Bank.