Japan Post share sale raises US$11bil after solid demand
TOKYO: Japan Post Holdings Co priced a major government sale of its stock at a 2% discount to its closing price, valuing the offering at US$11bil and making it the world’s second-largest this year.
That compares with an indicative range of a 2%-4% discount to the firm’s closing price that had been flagged by the sale’s underwriters.
The value of the deal could later total some 1.3 trillion yen (US$11.6bil) if an over-allotment of shares is fully taken up.
Although there had been worries earlier in the sale process that M&A missteps by Japan Post as well as lack of clear growth prospects would blunt appetite for the offering, the firm’s relatively robust dividend yield lured domestic retail investors in particular.
“Our customers buy stocks to hold as long-term assets. Japan Post is a stock our conservative custom- ers like,” said Koji Taki, head of sales at Imamura Securities Co.
He noted that the firm’s dividend yield of about 3.7% compared favourably with the average Japanese bank deposit rate of 0.001%.
The sale was the first since the 2015 triple initial public offerings for the postal firm and its two units that are major financial firms in their own right - Japan Post Bank Co Ltd and Japan Post Insurance Co Ltd.
Japan Post said in a filing that the government is offering 929 million shares at 1,322 yen, some 6% below its IPO price of 1,400 yen. The size of the over-allotment will be determined tomorrow.
The offering is set to be the second-largest in the world so far this year, after Italian bank UniCredit’s US$13.7bil share issue in February.