UPDATE 2-Japan's Shinsei opposes SBI's $1.1 bln bid, sets conditions for support

(Updates with CEO comments in 3rd, 4th paragraphs.)

TOKYO, Oct 21 (Reuters) - Japan’s Shinsei Bank Ltd said on Thursday it opposed SBI Holdings’ $1.1 billion tender offer bid, but could support it if SBI removes the upper limit of its planned share purchases and increases its offer price.

Online financial conglomerate SBI is planning to buy only up to 48% of Shinsei and leave the bank listed to avoid becoming a bank holding company that would put SBI under tighter regulatory scrutiny.

Shinsei President and CEO Hideyuki Kudo said the board of directors recommended that shareholders refrain from taking part in the tender offer bid, and added that the bank was looking for a partner.

“Seeing as the TOB is not in the common interest of shareholders under the current conditions, the company will continue efforts to find the most suitable partner until the extraordinary shareholders’ meeting,” Kudo told reporters.

Shinsei said SBI’s offer would hurt the interests of shareholders. The Tokyo-based lender said SBI’s offer price of 2,000 yen per share was too low, although it did not demand a specific price.

Shinsei’s shares closed at 1,916 yen on Thursday.

If SBI fails to meet Shinsei’s conditions by Nov. 19, Shinsei said it would hold an extraordinary shareholders’ meeting on Nov. 25 and seek approval to issue stock warrants to existing shareholders which would dilute SBI’s stake. (Reporting by Makiko Yamazaki and Sam Nussey; Editing by Christopher Cushing and Kim Coghill)