Japan Post Holding has set an indicative price range of 1,100-1,400 yen ($8.30-$11.70) per share in an initial public offering, one of a trio of listings by the state-owned post office that make up a privatization worth close to $12 billion in total, Japan's biggest in three decades.
The Japan Post holding company and two financial units - an insurer and a bank - plan to raise as much as a combined 1.4 trillion yen ($11.6 billion), with shares set for a Nov. 4 trading debut. Around 10 percent of each firm's shares are on offer, with more tranches to be sold in future.
Japan's government is betting heavily on successful IPOs for the trio, hoping to raise more than $33 billion to fund reconstruction after the country's 2011 earthquake and tsunami. It's pitching the IPOs squarely at domestic mom-and-pop investors who know and trust the national post office - with early stockbroker indications suggesting strong retail interest.
Prime Minister Shinzo Abe is also betting the market debut of a household corporate name will trigger a long-desired shift of stockpiled domestic savings into shares, stoking Tokyo's equity market. Around 80 percent of the three IPOs are reserved for domestic investors, with almost all of those tranches to be sold to retail investors.
The Japan Post Holdings range encompasses a preliminary indicative price of 1,350 yen set last month - a price that value the firm at about $50 billion. Some described the IPOs as a must-have offer that's not overly price-sensitive. "A few hundred yen one way or the other isn't going to make a big difference. This is going to be a staple holding of long-term portfolios," said Gavin Parry, Managing Director at the Parry International Trading brokerage in Hong Kong.
"It's not a regular kind of deal, it's the biggest IPO so far this century in Japan and everyone's got to have it."
Book-building for the Japan Post Holdings offer, the biggest of the three at up to 693 billion yen, runs from Oct. 8 through Oct. 23, with a final offering price to be set on Oct. 26.
Meanwhile Japan Post Bank set an indicative price range of 1,250-1,450 yen per share for its IPO, giving it a potential total market value of up to 6.5 trillion yen. Japan Post Insurance set a range of 1,900-2,200 yen, possibly valuing the company at as much 1.3 trillion yen.
The book-building period for the bank and insurance firms is shorter than for the holding company, running from Oct. 8 until Oct. 16, with final offering prices to be set on Oct. 19 ahead of the Nov. 4 debut.
Eleven companies have been hired as lead underwriters for the offerings with Mitsubishi UFJ Morgan Stanley, Nomura Securities, Goldman Sachs and JPMorgan chosen as global coordinators.