Nikko investor says won't sell to Citi at 1,700 yen

NEW YORK, April 20 (Reuters) - Another big shareholder of Nikko Cordial Corp. 8603.T said on Friday it will not tender its stake in the No. 3 Japanese securities firm at the 1,700 yen per share being offered by Citigroup (C.N) in its roughly $14 billion bid for Nikko.

A spokesman for Southeastern Asset Management, Inc. said in a statement the firm "does not intend to tender the approximately 6.6 percent of Nikko Cordial owned by its clients at the 1,700 yen per share price offered by Citigroup."

That followed a similar statement late on Thursday by Orbis Investment Management saying it would not tender its Nikko shares at 1,700 yen and that it would maintain a sell order for its roughly 5.8 percent stake at 1,900 yen per share.

Orbis also said that 29 per cent of Nikko shares were now on offer at 1,900 yen per share, above Citigroup's offer. This could put pressure on Citigroup to raise its offer. Citigroup was not immediately available for comment.

Management at Nikko has agreed to the Citigroup deal, which would be the biggest-ever foreign buyout of a Japanese company.

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.

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 shareholders, who had dismissed its offer as too low.