- Nintendo’s (OTC Pink:NTDOF) long‑time strategic shareholders—including MUFG Bank, the Bank of Kyoto, Resona Bank, and DeNA—plan to sell about ¥290 billion (US$1.9 billion) in shares as part of an unwind of cross‑share holdings
- Nintendo will counterbalance the sale with a share buyback of up to ¥100 billion, covering as many as 14 million shares
- Following the announcement, Nintendo’s shares closed nearly 3 per cent higher, while Kyoto Financial Group shares jumped almost 10 per cent
- Nintendo stock (OTC Pink:NTDOF) last traded at US$56.54
Nintendo (OTC Pink:NTDOF) is set for a major reshaping of its shareholder base as several long‑time strategic stakeholders—including MUFG Bank, the Bank of Kyoto, Resona Bank, and mobile‑gaming firm DeNA—prepare to sell a combined ¥290 billion (US$1.9 billion) worth of shares, marking one of the largest unwinding moves yet in Japan’s continuing retreat from cross‑shareholdings. The sale, first reported by Reuters, uses Friday’s closing price and excludes an overallotment option.
The Kyoto‑based game maker behind global franchises such as Super Mario also announced that it will buy back up to ¥100 billion worth of its own shares—up to 14 million shares in total—as part of an effort to absorb a portion of the sell‑down and stabilize its capital structure.
Market reaction
Following the Reuters report, Nintendo’s stock pared earlier gains but still closed nearly 3 per cent higher on Friday, signalling investor confidence in the company’s buyback and long‑term strategy. Shares of Kyoto Financial Group, the parent company of the Bank of Kyoto, surged almost 10 per cent as markets digested the news of the bank’s participation in the unwind.
Who is selling?
The group of sellers reflects several of Nintendo’s long‑standing corporate partners:
- MUFG Bank, Japan’s largest lender and part of Mitsubishi UFJ Financial Group, will sell Nintendo shares held through a trust bank
- The Bank of Kyoto, a regional lender with deep ties to Nintendo’s home city, will also reduce its holdings
- Resona Bank, part of Resona Holdings, and DeNA, a long‑time Nintendo collaborator in mobile gaming, will participate as well
As of the most recent publicly available filings, the Bank of Kyoto held a 4.19 per cent stake, while MUFG Bank held 3.62 per cent through trust bank accounts. Both institutions have previously outlined policies to reduce cross‑shareholdings in response to regulatory pressure.
Why the unwind now?
Japan’s financial regulators and the Tokyo Stock Exchange have for years urged corporations to unwind cross‑shareholdings—an entrenched practice in which companies hold equity stakes in one another to cement business ties. Critics, including governance experts and overseas investors, argue that such arrangements insulate management from shareholder oversight and hinder market transparency.
This latest unwind by Nintendo’s strategic shareholders follows a similar, though much smaller, sale in 2019, when banks offloaded roughly ¥71 billion worth of Nintendo shares.
The move also parallels broader shifts underway among Japan’s corporate giants, with Toyota (OTC Pink: TOYOF) recently planning a ¥19 billion unwind of its own strategic holdings. Though common in Japan for decades, cross‑shareholding is far less prevalent in Western markets.
A turning point for Nintendo’s investor base
While the sale represents about 2.8 per cent of Nintendo’s outstanding shares, analysts say the shift signals a broader evolution in Japanese corporate governance—and possibly a step toward a more globally aligned shareholder structure for Nintendo.
The share buyback authorization suggests the company is prepared to mitigate ownership dilution and maintain stability as large institutional partners scale back their stakes.
About Nintendo
With headquarters in Kyoto, Japan Nintendo Co., Ltd. is a multinational video game company that develops, publishes and releases video games and video game consoles.
Nintendo stock (OTC Pink:NTDOF) last traded at US$56.54 (C$77.21) in New York, where it has lost 24 per cent in year, and ¥8,995.00 (C$78.69) in Japan.
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