Nintendo Moves Toward Stronger Governance with $1.9 Billion Share Plan

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Prime Highlights

Nintendo plans a share sale worth around $1.9 billion as part of changes in its ownership structure.
The company is also considering a share buyback, showing confidence in its business and future growth.

Key Facts

MUFG Bank and Bank of Kyoto are expected to reduce their stakes in Nintendo.
The move aligns with efforts by the Tokyo Stock Exchange to improve transparency and reduce cross-shareholdings in Japan.

Background:

Nintendo is preparing for a major share sale worth about $1.9 billion (300 billion yen), as key banking partners plan to reduce their holdings in the company, according to sources. The move is part of a broader effort in Japan to unwind long-standing cross-shareholding practices and improve corporate governance.

Sources said companies, including MUFG Bank and Bank of Kyoto, are likely to sell shares in Nintendo, the Kyoto-based gaming company known for its popular franchises. The total sales could reach around 300 billion yen, and Nintendo may make a final decision soon. At the same time, the company is also considering a share buyback, which could help support its stock value.

Following the report, Nintendo’s shares trimmed earlier gains but still ended up 2.4%. Meanwhile, Kyoto Financial Group, which is linked to the Bank of Kyoto, saw its shares rise sharply by 9%.

Data shows that as of last year, the Bank of Kyoto held a 4.19% stake in Nintendo, while MUFG Bank held about 3.62% through a trust bank. Both banks have already stated policies to gradually reduce such cross-shareholdings. A similar share sale in 2019, involving these and other firms, was valued at around 71 billion yen.

Regulators and the Tokyo Stock Exchange are asking companies to be more open and use their money better. Cross-shareholding, where companies own shares in each other, has been criticized by global investors and experts.

This is not just about Nintendo. Toyota has also planned to sell about $19 billion worth of such holdings, showing a wider change in Japan.

Nintendo has not commented yet, but these steps show a shift toward better business practices. Experts say this could build more investor trust and bring Japanese companies closer to global standards.