If at first you don't succeed, you can always up your bid. This appears to be the lesson Citigroup (NYSE:C) has learned in its bid to acquire Nikko Cordial. Citi initially offered 1,350 Yen ($11.54) per share for Nikko, but approximately 30% of shareholders complained that the offer was a lowball bid.

In response to these complaints, and with the Tokyo Stock Exchange deciding yesterday not to delist Nikko for its accounting problems, Citi has upped its bid to 1,700 Yen ($14.53). Nikko not getting delisted likely played a big part in Citi's thinking, as it leaves the market for the shares open. However, the bid is still short of the 2,000 yen per share that Southeastern Asset Management and at least one other large shareholder claimed Nikko is worth.

Perhaps more interesting is that this continues a trend of the Japanese markets being more open and fluid. Deals made behind closed doors in smoke-filled rooms are becoming harder and harder to pull off -- though they still sound shady. The most recent example of this is Ichigo Asset Management picking up a large stake in Tokyo Kohetsu and, after rallying other shareholders, scuttling a merger with Osaka Steel Co., because the premium on the deal was too small.

It will be interesting to see if Citi's new, sweetened offer holds up. While the offer is a 26% improvement, it is still well below some of the numbers large shareholders have thrown around. And with Nikko remaining listed, it makes it that much easier for the market to force Citi's hand.

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At the time of publication, Nathan Parmelee had no financial interest in any of the companies mentioned. He's having a lot of fun tracking the subprime lenders and potential next wave of the subprime fallout in Motley Fool CAPS, too. At the time of publication, Nathan was ranked 61st out of 24,252 CAPS investors. The Motley Fool has an ironclad disclosure policy.

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