After the close of trading in Japan today, Monex Group has announced that Shizuoka Bank has acquired a 19.54% stake in the multi-asset broker. Shares of Monex are being sold by ORIX Corporation, which has been the largest single shareholder of Monex. Under terms of the deal, Shizuoka is paying $235.2 million (¥24.4B) for ORIX’s stake, which values shares at ¥434, an 8% premium at today’s closing price of ¥402 on the Tokyo Stock Exchange.
With the deal, Monex and Shizuoka announced the formation of a business alliance with the aim of creating synergies to add value to both firms. A provider of local banking services in the Shizuoka region, according to a joint statement of the deal, acquiring a portion of Monex is part of the bank’s goal of pursuing “new growth opportunities” in both Japan and foreign markets. As such, with the deal, Shizuoka will be aiming to take advantage of opportunities where it can leverage Monex’s existing regulatory presence in such markets as the US and China. For Monex, the firm is one of the larger providers of online brokering of multi-assets in Japan, and will be expected to be able to take advantage of Shizuoka’s local branches to market securities products to the bank’s existing client base.
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Upon announcing the deal, it was stated that Shizuoka is likely to increase its stake in Monex to reach an ownership level of slightly above 20%. At the close of trading today, shares of Shizuoka were at ¥1020, with a market cap of $6.539B compared to Monex’s $1.114B market value before the deal. According to a statement from ORIX Corporation on the news, the sale was initiated by a proposal from Shizuoka Bank to buy out their stake in Monex.
For ORIX, the sale may have been viewed as a timely opportunity to sell their Monex shares, which at ¥434 represent a four-fold increase in value from their 2012 lows. The shares being sold are part of an all stock sale in a 2009 sale of ORIX Corporation’s securities unit to Monex Group for $246 million. Since that period, the value of ORIX’s ownership has been experiencing declines, before bottoming out in the beginning of 2012. As such, the Shizuoka offer provided ORIX an opportunity to ultimately receive cash from its 2009 transaction of its securities business.