People familiar with the matter reported that Nintendo intends to unwind strategic pieces of shareholding, where companies such as MUFG Bank and the Bank of Kyoto would sell some shares of the “Super Mario” maker.
The sale is projected to value approximately 300 billion yen ($1.9 billion), and Nintendo might make a decision as soon as Friday. The sources also indicated that the Kyoto-based gaming company is planning a buyback.
Nintendo is planning to report its plan to Reuters in the first instance. Nintendo failed to reply to a request regarding a comment. The sources declined to be identified as the information is not public. Nintendo stocks lost some of their gains and improved by 2.4 percent.
The two banks have made policies in order to minimize cross-shareholdings. A sale of Nintendo shares in 2019, which they took part in with other involved parties, amounted to approximately 71 billion yen.
However, the Bank of Kyoto, a regional lender, owns a 4.19 percent stake in Nintendo as of September last year. The largest bank in Japan (MUFG Bank) was held by a trust bank with 3.62 percent.
Mitsubishi UFJ Financial Group and Kyoto Financial Group declined to comment and did not respond to a request to comment, respectively. Kyoto Financial’s shares surged by 9 percent.
Regulators and the Tokyo Stock Exchange have been encouraging Japanese companies to unwind their cross-shareholdings.
Reuters stated on Thursday that Toyota is strategizing the unwinding of strategic shareholdings that would see banks and insurers divesting approximately $19 billion of its shares.
This practice, where firms subscribe to one another in order to solidify business relationships have been criticised by governance experts and foreign investors alike as a way of protecting the management from shareholders. Whereas the practice has prevailed in Japan for decades, it is less prevalent in the West.
