Nintendo is preparing for a major unwinding of strategic cross-shareholdings that would see lenders including MUFG Bank and the Bank of Kyoto sell shares in the company, according to Reuters.
The disposal is expected to amount to about ¥300 bn, or roughly $1.9 bn, two of the sources said. A decision could come as early as Friday. The Kyoto-based maker of the «Super Mario» franchise is also planning a share buyback, the sources added. Reuters is reporting the plans for the first time.
Shares in Nintendo trimmed earlier gains and were last up 2.4%. Kyoto Financial Group, parent of the Bank of Kyoto, saw its shares jump 9%. Mitsubishi UFJ Financial Group declined to comment, while Kyoto Financial did not respond to a request for comment.
Both MUFG Bank and the Bank of Kyoto have policies aimed at reducing cross-shareholdings. In 2019, the two banks and others took part in a sale of Nintendo shares worth about ¥71 bn.
As of September last year, the Bank of Kyoto held a 4.19% stake in Nintendo. MUFG Bank, Japan’s largest lender, owned 3.62% through a trust bank.
Japanese regulators and the Tokyo Stock Exchange have been pressing companies to scale back cross-shareholdings, a longstanding practice in which firms hold stakes in one another to strengthen business ties. Governance specialists and overseas investors have criticised the system, arguing that it shields management from shareholder scrutiny. While common in Japan for decades, such arrangements are far less prevalent in Western markets.
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