UPDATE - SBI considers buying Cosmo Sec stake from Resona
Wednesday March 17, 4:51 am ET
By Edwina Gibbs
(Writes through with comment from SBI, details)
TOKYO, March 17 (Reuters) - Softbank Investment Corp (Tokyo:8473.T - News), a top Japanese venture capital firm keen to become a comprehensive financial services company, said on Wednesday it was considering buying a stake in mid-sized broker Cosmo Securities (Tokyo:8611.T - News) from Resona Holdings Inc (Tokyo:8308.T - News).
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"We've only just begun to consider the matter so the question of whether we might take all or part of Resona's stake is one for the future," said Katsuhiro Shimada, a Softbank Investment (SBI) investor relations official.
Resona, Japan's fifth-largest banking group, owns 59.6 percent of Cosmo, which has a market value of 130 billion yen ($1.20 billion).
Resona, which said it was talking to more than one prospective buyer and had not made any decisions, has been aggressively streamlining its operations after requiring an infusion of public funds to shore up its capital last June amounting to 1.96 trillion yen.
Osaka-based Cosmo Securities, which posted a net loss of 5.6 billion yen in the business year to March 2003, is a comprehensive securities firm with online commissions accounting for around 30 percent of its stockbroking.
SBI, owned 52.45 percent by Softbank Finance, the wholly owned financial arm of Softbank Corp (Tokyo:9984.T - News), already owns E*Trade Securities, Japan's biggest online broker.
It also took control of two unlisted domestic brokers late last year at a total cost of 9.1 billion yen.
By beefing up its conventional securities operations and investment banking services, SBI aims to turn itself into a comprehensive financial services firm that can compete with top full-service brokerages led by Nomura Holdings Inc (Tokyo:8604.T - News).
SBI posted a solid quarterly profit of 1.5 billion yen for the October-December period, bolstered by the best ever quarterly performance of E*Trade. It plans to take E*Trade public by the end of the year.
Earlier this week Resona said it would sell 100 billion yen in debt held by its affiliated real estate company to a unit of General Electric Co (NYSE:GE - News).
Prior to the announcement, SBI's shares closed up 1.65 percent at 123,000 yen. Cosmo's stock ended 0.66 percent higher at 307 yen while Resona's gained 2.38 percent to 172 yen.
The Nikkei benchmark average rose 1.73 percent. ($1=108.81 Yen)
