Daiwa Securities to Buy Aozora Bank Stake From Activist Fund

Daiwa Securities Group Inc. has announced its acquisition of a stake in Aozora Bank Ltd. from a fund associated with Japan’s leading activist investor. The deal puts an end to months of speculation regarding the fund’s potential actions, as it has not publicly made any demands on the bank. Daiwa will purchase the shares from City Index Eleventh, a fund connected to Yoshiaki Murakami and Aya Nomura, who is Murakami’s daughter. The alliance between Daiwa and Aozora will focus on cooperation in wealth management, real estate, mergers and acquisitions, and startups. The purchase price per share will be 2,415.5 yen, resulting in a total investment of approximately 27.9 billion yen ($177 million). This acquisition will increase Daiwa’s stake in Aozora to 23.95%.
In May, Daiwa announced its intention to purchase a stake in Aozora Bank for approximately 51.4 billion yen, providing the lender with much-needed capital following its first loss in 15 years. Aozora surprised the market earlier in February with losses incurred from its portfolio of office property loans in the US.

As a result of this news, Daiwa’s shares experienced a decline of up to 1.9% to 1,290 yen, while Aozora’s shares saw an increase of up to 3.7% to 2,465 yen.

Additionally, Aozora Bank will be adding a nominee put forth by Daiwa to its board as an outside director.

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