TOKYO - Nikko Cordial Corporation surged by the daily limit on the Tokyo Stock Exchange after Citigroup said it will pay $4.6 billion to buy the remaining shares it doesn't own in Japan's third-biggest securities firm.

The news would appear to resolve a disagreement over the value of Nikko between Citigroup and several significant shareholders, including Bermuda-based Orbis Mutual Funds, which was reported in April this year to own 5.8 percent of Nikko shares.

Orbis felt that Citigroup's offer price of 1,700 yen per share was well below the brokerage's true value and it slapped a sell order on its shares at 1,900 yen, urging others to follow suit. Many did so, to the point where owners of some 28 percent of shares had applied similar sell orders.

Yesterday it was announced that Nikko Cordial stockholders will receive the equivalent of about 1,700 yen a share, 16 percent more than Nikko's 1,462 yen close on Tuesday, for the outstanding 32 percent of the company. Nikko rose the exchange-imposed 200 yen limit to 1,662 yen, up 14 percent from yesterday and 2.2 percent below the offer price.

Citigroup's purchase marks the first since the government changed the law on takeovers, allowing overseas companies to use their stock to make acquisitions. Takeovers of Japanese companies by overseas firms tripled this year to $28.2 billion, according to data compiled by Bloomberg.

"People are buying up Nikko stock to the purchase price of 1,700 yen," said Shoichi Arisawa, a Tokyo-based manager at Iwai Securities Co. "Using stock underscores an improvement in market conditions."

The additional shares will cost Citigroup, the biggest US bank, 530 billion yen ($4.6 billion).