Japan’s MUFG mulls sweeter HDB Financial offer, seeks say in strategy

Mitsubishi UFJ Financial Group Inc. is considering sweetening its $1.7 billion offer for a minority stake in HDFC Bank Ltd.’s consumer lending unit in India, with a deal potentially hinging on valuation and the Japanese bank having a say in strategy, according to people familiar with the matter.

The two sides are seeking to reach an agreement in about a month, the people said, asking not to be identified discussing private information. MUFG has been working on the purchase of a 20% stake in HDB Financial Services Ltd., Bloomberg News reported on April 12. A potential premium on such an investment is limited given MUFG would only be buying a minority stake in the business that offers personal, gold and auto loans, the people said. Still, MUFG sees the prospective deal as a way to form a long-term partnership with HDBF and build its presence in India, the people said. Final details under discussion include MUFG’s influence on HDBF’s strategy, the people said.