UPDATE 1-Investor says 29 pct of Nikko for sale above Citi bid
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NEW YORK, April 19 (Reuters) - Orbis Investment Management, a shareholder of Nikko Cordial Corp. 8603.T, said on Thursday that 29 per cent of Nikko shares were now on offer at a price above Citigroup's (C.N) takeover bid for the No. 3 Japanese securities firm.
Orbis said 29 percent of Nikko stock was on sale at 1,900 yen per share, above the 1,700 yen being offered by Citigroup in its roughly $14 billion bid.
Bermuda-based Orbis said it would not tender its Nikko shares at 1,700 yen and would maintain its sell order for its roughly 5.8 percent stake in Nikko at 1,900 yen per share.
The move has put pressure on Citigroup to raise its offer for Nikko. Citigroup was not immediately available for comment.
Last month, Citigroup began accepting tenders for its takeover bid as it aims for a minimum stake of 50 percent, and said it would not increase its bid a second time. Its original offer valued Nikko at 1,350 yen per share.
The tender closes on April 26.
In a statement late on Thursday, Orbis said it considered Citigroup's offer inadequate.
Orbis said it believes "the process which led to the Citigroup offer was not conducted in an open and transparent manner and, as a result, the offer materially undervalues Nikko Cordial."
The shareholder said it was encouraged that it "is not alone in its views on the inadequacies of the tender offer" and that at close of trading on April 19th, 29 percent of Nikko Cordial shares were on offer at 1,900 yen per share.
Orbis said it has owned Nikko Cordial shares since 2002 and believes the interests of its clients would be better served by maintaining its investment rather than selling at 1,700 yen per share.
Citigroup raised its bid price after Nikko escaped a possible delisting by the Tokyo Stock Exchange over an accounting scandal. The stock's continued listing weakened the U.S. bank's leverage against large North American investors like Orbis, who had dismissed its offer as too low.
Management at Nikko has agreed to the Citigroup deal, which would be the biggest-ever foreign buyout of a Japanese company.
