UFJ confirms rival merger offer
(CNN) -- Japan's fourth-largest banking group, UFJ Holdings, has confirmed it has received a merger proposal from Sumitomo Mitsui Financial Group (SMFG).
The offer, pitched at about $4.5 billion, adds to the bidding tension surrounding UFJ, which already has a favored suitor in Mitsubishi Tokyo Financial Group (MTFG).
While UFJ said Monday it would examine the new offer, it said there was no change to its agreement last month to begin integration talks with MTFG.
On Sunday, SMFG president Yoshifumi Nishikawa told Japanese television he had offered UFJ more than 500 billion yen ($4.52 billion) in a formal merger proposal.
Japanese media reports say MTFG has offered UFJ a 500 billion yen cash injection to help it deal with losses from bad loans.
UFJ last Friday posted a net first-quarter loss of 91.58 billion yen. It is the weakest of Japan's four megabanks and the only one to post a loss last financial year.
If the UFJ-MTFG merger were to go ahead, it would create the world's biggest banking group, with assets of 188 trillion yen ($1.7 trillion), putting it ahead of U.S. financial giant Citigroup.
A merger between UFJ and SMFG would create a group with total assets of 180 trillion yen. The other member of Japan's big four, Mizuho Financial Group, has assets of 135 trillion yen.
In May, UFJ had agreed to sell its trust bank to Sumitomo Mitsui, but cancelled that agreement in mid-July so it could pursue merger talks with MTFG.
A Tokyo court in late July upheld a challenge from Sumitomo Mitsui against that plan, and ordered UFJ and MTFG to put their talks on hold.
Shares in UFJ closed 3.3 percent higher Monday at 441,000 yen, on a day when the overall market slipped about half a percent. Suitor SMFG lost 1.9 percent to 623,000 yen and MTFG fell about 1 percent to 925,000 yen.
