Aug. 11 (Bloomberg) -- Yasuo Takei, founder of consumer lender Takefuji Corp. and Japan's second-richest man, died yesterday at the age of 76. He succumbed to liver failure at his home in Tokyo's Suginami ward, Takefuji said today.

Takei's $5.6 billion fortune was second only to Softbank Corp. founder Masayoshi Son's $7 billion, according to Forbes Asia. Last year, Takei complied with a court order to divest to less than 25 percent his family-held stake in the Tokyo-based company he started in 1966. Takei was handed a suspended jail sentence in 2004 for ordering illegal wiretaps of journalists.

Takei's death, almost three years after he stepped down as chairman, prompted a rally in Takefuji shares, which gained 5.3 percent to 5,780 yen in Tokyo today. Investors view the lender as a possible takeover target, and Canadian financier Peter Cundill increased his holding last month for the second time this year.

``The rise in Takefuji's share price today is probably based on a view that it will become an acquisition target after the former chairman's death,'' said Tsuyoshi Segawa, an investment strategist at Shinko Securities Co.

Takefuji earned 46.9 billion yen ($405 million) in the year ended March 31 and had total shareholder equity of $8.4 billion, according to data compiled by Bloomberg. That cash pile has attracted interest from buyout funds, which could use it to finance an acquisition.

Newbridge Capital Ltd. and Goldman Sachs Group Inc. both sought to buy stakes in Takefuji in 2004, people familiar with the plans said at that time.

Born in Saitama

Takei, who was born in Saitama prefecture in January 1930, founded the company in Tokyo in 1966, working out of a 13.2 square meter (142 square foot) office with four employees. He became one of Japan's richest men by making unsecured loans to individuals through nationwide offices and automated machines, using large billboards to guide customers to their locations.

Takefuji's loans grew to 1.54 trillion yen as of March 31, from 10 billion yen in 1977. The company listed shares on the Tokyo Stock Exchange in December 1998.

Takei stepped down as chairman in December 2003 after admitting to a series of telephone wiretaps. He ordered employees to tap two journalists in late 2000 and early 2001 because he believed they were writing negative articles about Takefuji, prosecutors said in 2004.

Takei and his family disposed of 49.9 million shares to overseas investors by September last year to prevent regulators from revoking Takefuji's business license after he pleaded guilty to the wiretapping charge.

Uncertain Environment

Takefuji named Megumu Motohisa, a former executive at Matsui Securities Co., as president in May 2004. Motohisa, recruited to restore investor confidence, stepped down after only 10 months for undisclosed personal reasons.

Concerns about a possible curb on lending rates and the scandals helped erode Takefuji's market value 28 percent this year. Other consumer lenders also slumped after a court said they can't enforce their highest interest charges and policymakers urged cuts. Aiful Corp., Japan's largest consumer lender, lost half its market value. A government committee is working on a draft bill to be presented to the Diet.

``Consumer lenders face a major transition as new rules are being discussed and the business environment isn't likely to improve immediately,'' said Junichi Misawa, who oversees $655 million of funds at STB Asset Management Co. ``Investors may see the loss of a person associated with scandals as a positive development.''

Expectations of a takeover bid were refueled last month when Peter Cundill & Associates (Bermuda) Ltd., the second- biggest shareholder in Takefuji, raised its stake to 8.53 percent from 7.33 percent. Overseas investors hold about 56 percent of the company, according to data compiled by Bloomberg.

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net

Last Updated: August 11, 2006 05:33 EDT