Nintendo is preparing to facilitate the sale of strategic cross-shareholdings held by several institutions, among them MUFG Bank and the Bank of Kyoto, people with knowledge of the situation said. Those sources indicated the coordinated sale would be in the neighborhood of 300 billion yen - roughly $1.9 billion - and that the company may finalize the plan as early as Friday, according to two of the sources.
In addition to arranging for these shareholders to divest, the company is also planning to execute a stock buyback, the sources added. The information has not been publicly announced and the people providing it asked not to be identified.
Nintendo did not provide a comment when asked. Mitsubishi UFJ Financial Group declined to comment and Kyoto Financial Group did not respond to requests for comment, the sources said.
Both MUFG Bank and the Bank of Kyoto have previously adopted policies aimed at reducing cross-shareholdings. Data cited by the sources show that in a 2019 instance of coordinated selling, participants including these banks and others disposed of shares totaling about 71 billion yen.
The Bank of Kyoto, characterized in the sources’ information as a regional lender, held a 4.19% stake in Nintendo as of September of last year. MUFG Bank held a 3.62% position, with that stake recorded as being held by a trust bank.
Regulators and the Tokyo Stock Exchange have been encouraging Japanese companies to reduce cross-shareholdings, the sources said. That regulatory push was referenced alongside reporting that Toyota is planning a separate unwinding of strategic stakes that would include banks and insurers selling around $19 billion of shares, according to a recent report.
The practice of companies holding each other’s stock to reinforce business relationships has drawn criticism from governance experts and from overseas investors, who say it can insulate management from shareholder influence. While this shareholder structure has been common in Japan for decades, the sources noted it is considerably less typical in many Western markets.
Exchange rate used in the reporting was $1 = 156.0200 yen.
Summary
- Nintendo is coordinating the sale of strategic stakes held by institutions including MUFG Bank and the Bank of Kyoto, with the transaction expected to total about 300 billion yen.
- The company is also planning a share buyback and could reach a decision as soon as Friday, according to multiple sources.
- Both banks have policies to pare back cross-shareholdings; prior coordinated selling in 2019 amounted to roughly 71 billion yen.
Analysis
The move would represent another example of Japanese firms and their key partners reducing cross-shareholdings amid regulatory and market pressure. The involvement of major and regional banks highlights the financial-sector implications, while the related buyback would affect Nintendo’s capital allocation.