NEW YORK (Bloomberg) — Citigroup Inc. may have to increase its $10.8 billion bid for Nikko Cordial Corp. after the Japanese brokerage’s four biggest shareholders — including Bermuda-based Orbis Investment Management Ltd. — rejected the offer as too low.The Tokyo Stock Exchange added to the pressure on Citigroup yesterday when it decided against delisting Nikko shares over an accounting scandal. This means investors in Japan who can only hold shares of publicly traded companies won’t be forced to sell. Nikko’s stock closed today four percent above Citigroup’s offer of 1,350 yen ($11.43) a share.

“Nikko’s shares may get a boost,” said Yoji Takeda, who helps manage $900 million at RBC Investment (Asia) Ltd. in Hong Kong. Investors are becoming increasingly reluctant to sell to Citigroup at the offer price, he said.

Harris Associates LP of Chicago, Orbis Investment Management Ltd. in Bermuda, Southeastern Asset Management Inc. of Memphis, Tennessee, and Toronto-based Mackenzie Financial Corp., which together control 27 percent of Nikko, have dismissed Citigroup’s approach, saying Nikko is worth closer to 2,000 yen a share.

“We are continuing our discussions with Nikko Cordial regarding the takeover bid,” Citigroup spokeswoman Atsuko Yoshitsugu said in an interview, declining to say whether the company would raise its offer. The companies are committed to a “comprehensive strategic alliance,” she said.

Revelations that former Nikko executives inflated profit in 2004 left the Tokyo-based brokerage in disarray and gave New York-based Citigroup an opportunity to jumpstart its Japan expansion by buying Nikko.

Nikko would give Citigroup control of more than 100 branches, enabling it to offer services such as wealth management to the brokerage’s clients. Regulators in 2004 shut Citigroup’s private bank in Japan because it failed to comply with money-laundering rules.

Wall Street firms have failed to crack the $4.5 trillion banking industry in Japan, the world’s second-biggest economy. Merrill Lynch & Co. and Morgan Stanley closed their retail- brokerage operations in the country after racking up multimillion-dollar losses.

Harris, Orbis and Southeastern said Nikko’s shares are worth at least 2,000 yen per share. Citigroup’s bid is almost ten percent lower than Nikko’s closing price on December 15, the last trading day before the accounting irregularities were disclosed.

The offer values Nikko at about 1.62 times book value, compared with 2.3 for Nomura Holdings Inc., Japan’s largest brokerage. Daiwa Securities Group Inc., the No. 2, trades at 2.41 times book value, according to data compiled by Bloomberg.