Sony Financial Sets Price Range for IPO
Sony's financial arm plans to raise as much as 348 billion yen ($3.03 billion) after setting a tentative price range of 380,000 to 400,000 yen per share for its initial public offering next month.
The range is lower than an assumed price of 415,000 yen announced earlier this month.
If the price is fixed at the top end of the range and an overallotment option is exercised, it will be Japan's largest market debut since Aozora Bank's 380 billion yen listing last November, according to research firm Dealogic.
Proceeds from the listing are expected to enable Sony to bolster its core electronics operations.
Sony competes head on with Samsung Electronics and Panasonic maker Matsushita Electric Industrial in such fast-growing but highly competitive businesses as flat TV operations.
The unit, Sony Financial Holdings, which oversees the group's online banking and insurance businesses, expects its net profit to rise 50% from a year earlier to 15 billion yen in the business year to March 2008.
With 90% of its revenues coming from life insurance operations, Sony Financial is set to become Japan's second listed life insurer after T&D Holdings.
Sony, which is in the final year of a three-year revival plan under Chief Executive Howard Stringer, will offer up to 795,000 existing shares, including an overallotment chunk of 70,000 shares, cutting its stake in the wholly-owned unit to 60 percent. The financial unit plans to sell 75,000 new shares.
The top end of the price range would value the whole of the financial unit at about 870 billion yen ($7.57 billion), below original market expectations of around 1 trillion yen, indicating that the price range has likely been set conservatively.
The actual offer price for Sony Financial Holdings will be set on Oct. 1 ahead of its planned listing on the Tokyo Stock Exchange on Oct. 11.
The listing of the financial unit is Sony's latest step to lower its exposure to non-core businesses and focus on key divisions such as electronics operations.
The Tokyo-based electronics and entertainment conglomerate earlier this year cut its holdings in online broker Monex Beans Holdings and last year shed its stake in a wide range of retail activities such as cosmetics and restaurants.
The IPO is being lead-managed by Nomura Securities and JPMorgan, which has experience in the insurance sector. JPMorgan was a bookrunner on Taiyo Life Insurance's IPO and advised on
Taiyo's merger with Daido Life to form T&D Holdings.
Ahead of the announcement of the price range, shares in Sony closed down 2.2% at 5,300 yen, underperforming the Tokyo stock market's electrical machinery index IELEC, which fell 1.2%.