SoftBank weighs the largest public listing ever
LONDON: SoftBank Group Corp is considering seeking a valuation of about US$90bil for its domestic wireless business in a planned initial public offering (IPO), people familiar with the matter said.
The shares rose the most in almost a month. SoftBank is speaking to advisers about selling a third – or about US$30bil – of the business in the IPO, the people said, asking not to be identified as the talks aren’t public.
Discussions are preliminary and the final valuation would depend on investors’ feedback, they said.
SoftBank rose as much as 6% in Tokyo yesterday, the biggest intraday increase since July. A representative for SoftBank declined to comment.
A US$30bil-IPO would make SoftBank Mobile the largest listing ever. Alibaba Group Holding Ltd made its market debut in 2014 with a US$25bil offering, the biggest so far.
SoftBank is seeking a higher price-to-earnings premium for its wireless business than its closest publicly traded peers, NTT Docomo Inc and KDDI Corp, the people said.
Shareholders believed the cash-rich company’s guaranteed dividend yield as well as its technology partnerships and the benefits of being linked to the parent firm may help achieve that higher valuation, they said.
NTT Docomo ended Monday with a market value of almost US$100bil, while KDDI was at about US$70bil.
The SoftBank unit could be listed as early as the fourth quarter, the people said.
Other companies coming to market this year with high expectations on valuations have found investors don’t always agree with them.
Chinese smartphone maker Xiaomi Corp currently has a market value of almost US$50bil following its debut in July, or just half of the figure touted when it began the process in 2017.
SoftBank founder Masayoshi Son said in his investor presentation on Monday that he’s working toward a listing on the Tokyo Stock Exchange.
The division’s free cashflow more than doubled to 154 billion yen (US$1.4bil) in the three months ended June.
Revenue from domestic telecom operations, which include wireless, broadband and fixed-line services, rose 4.6% to 880.5 billion yen in the quarter. Profit was little changed.