Shinsei Bank, a leading diversified Japanese financial institution, has reportedly requested Sony Group Corp. to assist it in countering a takeover proposal by online banking business, SBI Holdings Inc., according to sources familiar with the matter.
Supposedly, if Sony agrees to become a "white knight", it will spark a bidding battle for Shinsei, which has robust capabilities in credit card and consumer loan businesses with more than three million retail bank accounts.
Shinsei has yet to comment on SBI's unsolicited tender offer, which it made last week. However, according to the sources, the Japanese bank is looking for buyers that are friendly, which includes the likes of Sony.
Meanwhile, Sony, which owns a banking venture, is slated to consider whether it should make a counterproposal, which would need the electronics behemoth to offer a greater purchase price than SBI.
Through its tender offer that runs until Oct. 25, SBI is trying to increase its overall stake within Shinsei, which is currently at about 20%, to a maximum of 48% for a total of 116.4 billion yen ($1.06 billion).
The acquisition proposal comes as SBI seeks to become Japan's fourth megabank. For the uninitiated, SBI CEO, Yoshitaka Kitao, is known to be close to departing Prime Minister Yoshihide Suga, and the two share the same view which calls for reform in Japan's regional banking industry.
SBI has stated emphatically that the existing Shinsei management is to blame for the bank's dismal performance. It also promises to outline a comprehensive policy on how Shinsei would repay public money received by its predecessor, the Long-Term Credit Bank of Japan.
In 2019, SBI began investing in Shinsei and suggested creating a financial and business cooperation. Shinsei, on the other hand, has been developing its relationship with SBI's rival, online brokerage Monex Group Inc.
The sources also reviled that Shinsei is considering adopting defensive measures against SBI's offer at an extraordinary shareholders' meeting as early as October.
Sources added that the steps are expected to involve giving share warrants, or the option to purchase Shinsei shares at a specific price, to current shareholders in order to dilute SBI's shareholdings and reduce its influence.