TOKYO--This week, well-regarded Japanese newsmagazine Sentaku published an article alleging that Nintendo is collaborating with UFJ Bank, which counts both Nintendo and Bandai among its corporate clients, to gain control of Bandai. The article is based on an interview with Makoto Yamashina, the son of Bandai's founder and one of the company's directors, as well as other industry insiders.

　　Nintendo's interest in Bandai is no secret: on September 16, Nintendo announced that it had purchased 1,280,000 shares of Bandai stock. This represents 2.6 percent of the company, making Nintendo the tenth-largest shareholder. The news spurred rumors of a takeover, but Nintendo issued a firm denial, saying "We have absolutely no intention of buying Bandai."

　　Bandai's CEO and President Takeo Takasu also denied the buyout rumors. In a press conference on September 22, he remarked that Nintendo was simply a reliable stockholder, saying "we welcome the prospect of increasing the number of our stockholders who are familiar with our business." At the time, industry watchers agreed this explanation was a little too ambiguous. Now, new information from Yamashina's interview with Sentaku magazine has made the denials of a takeover attempt very hard to believe.

　　Yamashina revealed that in a private meeting on August 19, Takasu urged him to sell Bandai shares to Nintendo. As the son of Bandai's founder and a former chairman of the company, Yamashina is one of Bandai's larger shareholders, with 2.56 million shares. Takasu asked Yamashina to sell 1 million of these shares to Nintendo, which would give it control of 2 percent of Bandai, but Yamashina refused, seeing the request as part of an effort to weaken his family's connection to the company.

　　Takasu, the article points out, took an unusual path to the top position at Bandai--and his August 19 meeting with Yamashina. Takasu's career at Bandai is relatively short. This is rare in a Japanese corporation as typically, leadership positions are filled by longtime employees. Sony Corporation's Idei, for instance, worked at Sony for more than 30 years before ascending to the position of CEO. In contrast, Takasu only joined Bandai in 1996. He was recruited by Yamashina, who lured Takasu away from his position as a branch manager at Sanwa Bank (now UFJ Bank), but given recent developments, Yamashina's efforts to bring Takasu into the company are rather ironic.

　　The failure of his August 19 meeting with Yamashina did not convince Takasu to give up his efforts to sell shares to Nintendo. At a September 25th board meeting, Takasu announced that Nintendo had approached UFJ Bank--Takasu's former employer--seeking assistance in purchasing Bandai shares. A number of financial institutions, as well as U.S. toy company Mattel, had sought to sell Bandai shares through UFJ, and the bank, Takasu reported to attendees at the meeting, was able to arrange a deal: Nintendo bought 1.28 million shares of Bandai stock.

　　Attending the board meeting in his current role as an outside director, Yamashina spoke against Nintendo's stock purchase. He felt that Takasu should have sought the board's opinion before--not after--concluding the deal, and he saw the purchase as a poor strategic move.

　　"As a software provider, it's in Bandai's best interests to maintain good relationships with Sony as well as Nintendo, especially as PlayStation software sales are central to our revenue. If Nintendo gains influence over Bandai, it could damage that relationship," Yamashina told Sentaku. Other board members did not side with Yamashina, so his objections had no effect.

　　In an interview with Sentaku, Yamashina drove the point home. He said he found Takasu's decision "unacceptable." Moreover, he added, Bandai is currently considering a stock buyback program, and if Mattel wanted to sell its stock, it would have been better for Bandai to purchase it.

　　But why is Takasu trying so hard to sell Bandai shares to Nintendo? According to Sentaku's article, Bandai shares are widely dispersed, and currently there is no majority stockholder. Even Makoto Yamashina, the son of the company's founder, owns only 5.2 percent of the company. So if Nintendo uses its 2.6 percent share in cooperation with UFJ Bank and UFJ Trust Bank, which holds 6 percent of Bandai, the home of Mario and Luigi could effectively control Bandai.

　　Even if Nintendo didn't have a strategic interest in the company, Bandai's shares make an attractive investment. The company has turned in some of its most profitable quarters this year, and its stock price has risen as a result. In fact, at the end of September, Bandai did a two-for-one split. In contrast, weak GameCube sales and negative reviews from analysts have dragged down Nintendo's stock.

　　Given these facts, Yamashina also questioned the timing of Nintendo's purchase. Bandai announced plans for its stock split on August 5. If the sale to Nintendo was decided before this point, Nintendo stood to profit considerably from the transaction. When Yamashina raised this issue at an October 20 board meeting, Sentaku reports, Takasu responded "the conversation with Nintendo took place on August 8." If that's the case, Yamashina shot back, "why did you ask me to sell shares to Nintendo on August 19?"

　　According to the article, industry insiders feel that Yamashina's suspicions about the motives of UFJ Bank and Nintendo are correct. One anonymous source commented "[Due to poor earnings] Nintendo is in a tight spot. UFJ is trying to strengthen the company while there's still time..."

　　GameSpot will be keeping an eye on all the companies involved to see how the situation develops.