Japanese lender Shinsei Bank has announced plans to withdraw defensive measures against the proposed $1.1bn tender offer by SBI.

The lender has changed its stance to “neutral” and cancelled the extraordinary general meeting of shareholders, which was called to secure their support for defensive measures.

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Shinsei Bank’s announcement comes just after media reports emerged that the government-backed Deposit Insurance Corporation of Japan (DICJ) is planning to vote in favour of SBI’s hostile bid.

The move paves way for SBI to acquire a near controlling stake (48%) in Shinsei Bank.

Notably, SBI and the Japanese government each own around 20% stake in the bank.

As per Nikkei’s report, City Index Eleventh, which holds about 4% voting rights in Shinsei Bank, sided with SBI, further weakening Shinsei Bank’s defensive measure.

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The defensive measure involved issuing shares to existing shareholders to dilute SBI’s holdings or the poison pill defence.

Last month, Shinsei Bank rejected the takeover bid by SBI and proposed new terms for the offer, which were rejected by SBI.

In its announcement, Shinsei Bank said it will accept three candidates recommended by SBI to serve as its board members.

It plans to hold an extraordinary general meeting of shareholders around early February 2022 to elect new directors.

Shinsei Bank’s current directors will retire as soon as new directors are elected; the lender added.

SBI plans to revamp Shinsei Bank’s management and find a way to pay back some of the $3.2bn public funds, which the lender had received from the government during the banking crisis two decades ago.