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Sumitomo seen bidding for Aozora
TOKYO, Japan -- Sumitomo Mitsui Financial Group has offered 100 billion yen ($841 million) for Softbank's 49 percent stake in Aozora Bank, according to a report. The Financial Times, which cited bankers close to the deal, states that the bid is an attempt to outdo Sumitomo Mitsui's rival in the bidding, the U.S. investment group Cerberus Capital Management. Softbank wants to sell its Aozora stake to focus on its broadband businesses. A 100 billion yen bid would give it a return of more than 100 percent on the 49 billion yen it paid for its Aozora stake in 2000. Cerberus, which already owns 11.5 percent of Aozora, has first refusal on buying Softbank's position. There is support in Japan for Aozora to be sold to a Japanese buyer, particularly with banking authorities. Support for a local bidSales of banks to overseas companies, particularly from the United States, often become political hot issues in Asia. Management often resists such sales, too, fearing a U.S. parent will slash jobs. Sumitomo Mitsui is one of Japan's four biggest banks. But it is still considered to be on shaky financial footing, given the large amount of bad loans on its books. Analysts have questioned the wisdom of it taking over another troubled bank at a time it is trying to improve its own balance sheet. If Softbank accepts the offer, that could prompt services company Orix Corp. and insurer Tokyo Fire & Marine to sell their matching 14.9 percent stakes in Aozora. Softbank's stock sank last week on a report that it and Orix had encouraged Aozora to leak customer information to Cerberus. (Full story) It closed up 1.67 percent on Tuesday, at 1,279 yen. But Sumitomo Mitsui shares fell 0.30 percent to 331,000 yen and underperformed the Nikkei average's 0.98 percent gain.
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