Japan's Shinsei Bank to withdraw poison pill defence against SBI Holdings' bid

FILE PHOTO: The Shinsei Bank logo is pictured at the lobby of the bank in Tokyo, Oct. 22, 2010. REUTERS/Yuriko Nakao/File Photo

TOKYO (Reuters) -Shinsei Bank said on Wednesday it will cancel plans to introduce a poison pill defence aimed at blocking SBI Holdings Inc's $1.1 billion bid, paving the way for the online financial conglomerate to take effective control of the lender.

The decision comes as sources familiar with the matter have said the government, which owns about 20% of Shinsei, looked unlikely to support the poison pill that Shinsei had planned to put to a shareholder vote on Thursday.

Shinsei said it will cancel the shareholders meeting.

The lack of government support would have defeated Shinsei's plan, with some hedge fund investors in favour of SBI's bid, separate sources have said.

Shinsei said it plans to accept independent board director candidates that SBI has proposed and to hold an extraordinary meeting around early February to elect new directors.

The current directors intend to step down as soon as the new directors are elected, it said.

SBI announced an offer to take a near-majority stake in the mid-sized Tokyo-based lender in September - an unsolicited bid that met opposition from Shinsei's management.

(Reporting by Makiko Yamazaki, Yuki Nitta and Sakura Murakami, Editing by Louise Heavens)

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