The Cerberus Group has entered final negotiations with Softbank Corp. to buy, along with another U.S. investment fund, all of its Aozora Bank shares, sources close to the deal said Thursday.
Cerberus has proposed paying about 100 billion yen for the shares, reportedly the same amount that Sumitomo Mitsui Financial Group Inc. has proposed in acquiring the Softbank stake in Aozora Bank.
But Cerberus plans to exercise an option that gives it preferential buyer status to obtain the bank's shares if Sumitomo Mitsui matches its offer, the sources said.
Cerberus currently holds a roughly 12 percent stake in Aozora Bank, the successor to the failed Nippon Credit Bank, while Internet-business investor Softbank holds about 49 percent.
A direct buyout of the Softbank stake would give Cerberus a 61 percent holding in Aozora Bank, but since the Financial Services Agency will not allow a foreign concern to take more than a 50 percent interest in a Japanese bank, Cerberus plans to limit its stake in Aozora Bank to around 49 percent, and let another U.S. investment fund take the rest, the sources said.
Cerberus is expected to announce the plan next Monday, and to apply to the FSA for approval of the acquisition soon afterward.
After becoming the top shareholder in Aozora Bank, Cerberus plans to dispatch senior executives and work closely with other major shareholders, including Orix Corp. and Tokio Marine & Fire Insurance Co., on developing the bank's operations, it said.
Aozora Bank was nationalized briefly after its collapse before being sold to the private sector. The acquisition by Cerberus would mean that the rehabilitation of Aozora Bank would be spearheaded by a foreign investor, as is the case with Shinsei Bank, the former Long-Term Credit Bank of Japan, which also was nationalized after failing.