Deposit Insurance Corporation of Japan (DICJ), a government-owned entity, is reportedly planning to vote against Shinsei Bank‘s defensive measures against the proposed $1.1bn SBI offer.

DICJ’s vote against the defensive measures would undo Shinsei Bank’s efforts to stop the hostile takeover by SBI, Reuters reported citing public broadcaster NHK.

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Shinsei Bank will soon hold an extraordinary shareholders’ meeting to secure support for its measures against the proposed deal.

The Japanese government and SBI each own around a 20% stake in the lender.

SBI is looking to raise its stake to 48% through the tender offer launched in September.

As per Nikkei’s report, City Index Eleventh, which holds about 4% voting rights, would vote against Shinsei’s defensive measures.

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Earlier, Shinsei Bank had asked SBI to remove the limit on its share purchase and pay over $1.1bn in its existing offer.

However, SBI had rejected the new conditions.

Siding with Shinsei Bank, proxy advisory firms Glass Lewis and Institutional Shareholder Services (ISS) have recommended shareholders to vote for the defensive measure.

These recommendations are expected to impact how foreign investors vote. They account for nearly 30% of the registered shareholders.

Much of it depends on how the government will vote. Notably, Shinsei still owes the government $3.2bn, which it had received as public funds during the banking crisis two decades ago.

The lender is also in talks with other potential buyers who could top SBI’s offer, Reuters said earlier citing sources.