Shinsei Bank seeks help from Sony to counter SBI’s takeover bid

Shinsei Bank has asked Sony Group Corp. to help counter a takeover bid by online financial firm SBI Holdings Inc., sources with knowledge of the matter said Wednesday.

If Sony agrees to become a so-called white knight, it would lead to a bidding war for Shinsei, which has strengths in the consumer loan and credit card businesses with some 3 million retail bank accounts.

Shinsei has yet to announce its position on SBI’s unsolicited tender offer announced last week. But the sources said the bank is seeking friendly buyers, including Sony.

Sony, which has a banking unit, is expected to consider whether to make a counterproposal, which would require the electronics conglomerate to offer a higher buying price than SBI’s.

In the tender offer through Oct. 25, SBI is seeking to raise its stake in Shinsei, currently at around 20%, to a maximum of 48% for as much as ¥116.4 billion ($1.06 billion).

The takeover bid comes as SBI is aiming to become a fourth megabank in Japan. CEO Yoshitaka Kitao is known to be close to outgoing Prime Minister Yoshihide Suga and the two have shared the view that the regional banking sector in Japan should be reorganized.

SBI has underscored that the current Shinsei management is responsible for the bank’s poor performance. It also promises to discuss a detailed policy on how Shinsei will repay public funds that its predecessor, the Long-Term Credit Bank of Japan, received.

SBI began investing in Shinsei in 2019 and has proposed forming a capital and business alliance. But Shinsei has been strengthening its partnership with SBI’s competitor, online brokerage Monex Group Inc.

Shinsei is considering proposing defense measures against SBI’s bid at an extraordinary shareholders meeting to be held as early as October, people close to the matter have said.

The measures are likely to include issuing share warrants, or the option to buy Shinsei stock at a particular price, to its existing shareholders to dilute SBI’s shareholdings and weaken its influence, the people said.