Authorities to Decide on Nikko Delisting Next Week

The Tokyo Stock Exchange is likely to decide next week on delisting brokerage Nikko Cordial instead of Friday as has been widely expected, Kyodo reported, citing a senior exchange official.

The Nikkei business daily had reported earlier this week that the TSE would likely decide on the delisting on Friday. Other media followed the Nikkei with similar reports, building up speculation the announcement would come this week.

But Kyodo, citing a senior TSE official, said the exchange was now expected to make a decision on Monday or after because it is still conducting hearings with Nikko officials.

Nikko, Japan's third-largest securities firm, has been under review by the TSE for a possible delisting since an accounting scandal related to an acquisition by its merchant banking business came to light in December.

On Tuesday, Citigroup announced a $10.8 billion tender offer for Nikko, and the delisting could help persuade shareholders to sell.

But the U.S. bank's takeover bid for Nikko could face a major setback after two major shareholders in the Japanese brokerage have said 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. Harris has a 7.5% stake in Nikko and Herro says the fund will reject the offer.

Southeastern Asset Mangement, another makor shareholder voiced similar sentiments. "We believe that the price is not sufficient and that the company is worth at least 2,000 yen per share," Southeastern Vice President Andrew McCarroll said in a statement.