TOKYO, Sept. 10 (Xinhua) -- Japanese online financial firm SBI Holdings Inc. (SBI) launched a tender offer on Friday, aiming to make its smaller rival Shinsei Bank a subsidiary of SBI, with buy orders pouring in for the bank's shares, local media reported Friday.
SBI's offer through Oct. 25 announced on Thursday might turn to be a hostile takeover since the Shinsei Bank board has not approved it yet.
The stock price of Shinsei Bank surged 20.8 percent on Friday in response.
Before this tender offer, SBI already had around 20 percent shares in Shinsei Bank. With a 2,000 yen (18 U.S. dollars) per share offer, about 40 percent higher than Shinsei's close price on Thursday, SBI planned to increase its stake to a maximum of 48 percent.
Following an idea shared by Japanese Prime Minister Yoshihide Suga, the SBI group has been strengthening alliances with regional banks to push for their reorganization.
Since September 2019, the group had started to purchase Shinsei Bank shares and repeatedly sought to form a capital alliance. However, SBI's plan did not go smoothly as the Shinsei Bank board was opposed to the idea of SBI becoming a larger shareholder.
Shinsei's predecessor, the Long-Term Credit Bank of Japan was collapsed in 1998 and received 370 billion yen (3.36 billion U.S. dollars) in public funds. Although Shinsei Bank performed well in the consumer loan and credit card businesses, it has yet to repay public funds.
Japanese Finance Minister Taro Aso said at a press conference, "Since (the government) injected public funds, namely taxpayers' money, into the bank, we certainly have to respond to the issue in terms of ensuring debt collection," adding that other major stockholders in Shinsei Bank "should judge properly" the tender offer and his ministry "will need to communicate well" with them.
SBI said on Thursday that if the offer were successful, Hirofumi Gomi, a former head of the Financial Services Agency, would be appointed as chairman of the Shinsei Bank board, adding details related to repaying the public funds would be discussed.
Aiming to become the fourth largest bank in Japan, SBI has formed a capital alliance with various regional banks, including Shimane Bank and Fukushima Bank.
Suga, who became prime minister in September last year, has prioritized reorganizing the regional banking sector, while the Bank of Japan also has an incentive program to promote mergers between regional banks. Enditem