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Friday, February 25, 2000
Softbank Obstinance Blamed For Delay In NCB Sale
TOKYO (Nikkei)--The negotiations to sell the failed Nippon Credit Bank to Softbank Corp. (9984) took longer than expected due to inflexibility over the purchase price on the part of the consortium led by Softbank, it was learned Thursday.
Hakuo Yanagisawa, former Financial Reconstruction minister, had predicted an early settlement. The process for selecting a buyer, however, took more than 14 months, three months longer than for the sale of another insolvent lender, Long-Term Credit Bank of Japan.
The number of prospective buyers was finally reduced to the Softbank-lead consortium and the Cerberus Group, a U.S. investment fund.
The Softbank bid insisted on 150 billion yen of government assistance for NCB, but refused to increase its bid offer above 1 billion yen.
The Cerberus Group, however, sought government funding of only 90-100 billion yen and offered to pay nearly 10 billion yen for NCB's goodwill. The Cerberus bid would have saved 60 billion yen in public funds.
"Such a difference negates any claim to superiority made for the Softbank group's rehabilitation plan," an FRC official said.
Because the sale of LTCB to U.S.-based Ripplewood Holdings LLP infuriated some nationalist lawmakers, the Softbank consortium assumed the FRC could not sell NCB to the foreign-owned Cerberus Group and refused to up its purchase price. In a last minute move to outbid Cerberus, however, Softbank President Masayoshi Son offered slightly more favorable terms than his rival group.
"If the FRC could have held an open public auction, the Softbank group would not have won," a source close to the deal said Thursday evening.
(The Nihon Keizai Shimbun Friday morning edition)
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