The bank is understood to have hired Gavin Anderson to advise it on an agreed merger with domestic rival Mitsubishi Tokyo Financial Group.
Their combined assets would be bigger than the world’s largest bank by assets, Citigroup. But another of Japan’s top four banks, Sumitomo Mitsui Financial Group, has put forward a rival proposal to merge with UFJ.
Sumitomo’s open offer is unusual in Japan, where negotiations are usually conducted behind closed doors. A key factor is thought to be the increasingly large stakes foreign shareholders have in Japan’s largest banks.
UFJ is listed in London and Tokyo, and around 31 per cent of the bank’s shareholders are foreign. Foreign shareholders have similar stakes in both MFG and Sumitomo.
On Monday, UFJ sent an open letter to shareholders to Japanese financial daily Nihon Keizai Shimbun, the Financial Times and The Wall Street Journal, committing the bank to keeping shareholders updated.
GA chief exec Richard Constant is advising UFJ president and CEO Ryosuke Tamakoshi.