SoftBank IPO seeks US$18bil from re­tail in­vestors

The Star Malaysia - StarBiz - - Foreign News -

TOKYO: SoftBank Group Corp is seek­ing to raise a record 2 tril­lion yen (US$18bil) from Ja­panese in­di­vid­u­als in the ini­tial pub­lic of­fer­ing of its mo­bile phone unit, tar­get­ing in­vestors who often get no in­ter­est on their sav­ings, said peo­ple fa­mil­iar with the mat­ter.

No­mura Hold­ings Inc, a joint global co­or­di­na­tor, will sell the big­gest part of the shares to the re­tail in­vestors, part of an IPO that could raise about 3 tril­lion yen in to­tal, said the peo­ple, ask­ing not to be named be­cause the tar­get is pri­vate. Tokyo-based SoftBank will an­nounce the de­tails for the de­but sale as early as next week, they said.

The amount of IPO stock al­lo­cated to in­di­vid­u­als varies from coun­try to coun­try – and in­deed from of­fer­ing to of­fer­ing – with in­sti­tu­tions often tak­ing a ma­jor­ity and re­tail in­vestors set­tling for the leftovers. SoftBank’s tar­get sug­gests the com- pany’s bankers an­tic­i­pate strong de­mand from Ja­pan’s yield-starved in­di­vid­u­als.

Chief ex­ec­u­tive of­fi­cer Masayoshi Son plans to pay healthy div­i­dends to at­tract in­vestors.

“Ja­panese in­di­vid­u­als are in­ter­ested in SoftBank shares as it’s top­i­cal and they can an­tic­i­pate high div­i­dends,” said Kazumi Tanaka, an IPO an­a­lyst at DZH Fi­nan­cial Re­search Inc in Tokyo.

“It won’t be im­pos­si­ble for the un­der­writ­ers to sell the shares to house­holds, even those who haven’t done stock trad­ing.”

The size of the IPO may change or the list­ing could be de­layed if there are fur­ther dis­rup­tions in the mar­ket, the peo­ple said.

The Nikkei 225 Stock Av­er­age has fallen about 7% since Oc­to­ber, and ri­val NTT Do­como Inc set off a plunge in wire­less op­er­a­tor shares last week by say­ing it may cut phone rates 40% af­ter Ja­pan’s gov­ern­ment pressed for re­duc­tions.

Rep­re­sen­ta­tives at SoftBank and No­mura de­clined to com­ment on the de­tails for the IPO.

The size of the sale to re­tail in­vestors would be a record in Ja­pan, ex­ceed­ing the IPOs for Ja­pan Post Hold­ings Co in 2015 and NTT Do­como Inc in 1998, which each raised about 1 tril­lion yen from in­di­vid­u­als, ac­cord­ing to data com­piled by Bloomberg.

SoftBank has picked No­mura, Gold­man Sachs Group Inc, Deutsche Bank AG, Mizuho Fi­nan­cial Group Inc and Su­mit­omo Mit­sui Fi­nan­cial Group Inc. among joint global co­or­di­na­tors, Bloomberg News re­ported last month.

The com­pany is seek­ing to sell about 2.5 tril­lion yen to 3 tril­lion yen of shares in the mo­bile unit, whose mar­ket value would be about 8 tril­lion yen, the peo­ple said. The mo­bile op­er­a­tor plans to start mar­ket­ing this month and list the shares on the Tokyo Stock Ex­change on Dec 19.

Do­mes­tic and for­eign bro­ker­ages ad­ver­tised heav­ily dur­ing Ja­pan’s base­ball cham­pi­onship, which was won by the Fukuoka SoftBank Hawks.

No­mura and other fi­nance gi­ants spent heav­ily at Fukuoka’s sta­dium to put their brands into front of the teams fans – and Son who at­tended to cheer on his team.

Ear­lier this week, Son told re­porters SoftBank will cut the num­ber of em­ploy­ees at the wire­less unit by about 40% over the next two or three years to boost its prof­itabil­ity, shift­ing the em­ploy­ees to new busi­ness ar­eas.

“Many peo­ple are start­ing to eval­u­ate the high div­i­dends and profit growth, and how that will af­fect the IPO price,” Son said at a press con­fer­ence on Mon­day.

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