Mitsubishi UFJ Financial Group suffered a setback in its $3bn bid to take 100 per cent control of Union Bank of California after a committee set up to advise minority shareholders on the offer rejected the bid as too low.

The special committee of the bank’s board of directors had in April rejected MUFG’s earlier offer of $58 per share for the 35 per cent of the US bank which MUFG does not already own. On Wednesday, the committee said the Japanese bank’s improved offer of $63 per share substantially undervalued the bank and was not in the interests of minority shareholders.