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Citigroup's Takeover Bid for Nikko Cordial Faces Major Setback

Citigroup's takeover bid of Nikko Cordial could face a major setback as a shareholder of the Japanese brokerage says the $10.8 billion takeover bid is inadequate.

Harris Associates' chief investment officer, David Herro, told the media that Nikko's shares were worth more than 2,000 yen a share, compared to Citigroup's offer of 1,350 yen. Herro said the fund will reject the offer.

Nikko Cordial shares traded higher on Thursday morning at 1,362 yen, slightly above Citigroup's bid. The higher price apparently reflects the sentiment that a higher bid may be forthcoming.