* First government share sale since firm's 2015 IPO
* Offering worth 22 pct of outstanding shares
* Japan Post will also buy back Y100 bln worth own shares (Adds lawmaker and fund manager comments, market impact, dividend yield, global coordinators, context)
TOKYO, Sept 11 (Reuters) - Japan's government on Monday said it will sell $12 billion worth of Japan Post Holdings Co Ltd stock in an announcement that fund managers gave a tepid reception, saying limited growth prospects is likely to dull demand from institutional investors.
The sale will be the first since the 2015 initial public offering (IPO) of the postal firm and its two units, Japan Post Bank Co Ltd and Japan Post Insurance Co Ltd. That sale also raised $12 billion, earmarked for reconstruction of areas devastated by an earthquake and tsunami in 2011.
"The company lacks growth potential appeal," said Kazuo Okabe, general manager at Fukoku Capital Management. "I don't think there will be strong demand from actively managed funds."
Japan Post, with 24,000 post offices and 400,000 employees, has spent the internet age minimizing the impact of a drop in letter delivery. It has also had to adjust to a competitive parcel delivery market that is booming thanks to e-commerce, but where the former monopoly is a distant third by market share.
The national postal service prepared for its transition to private ownership with an attempt to demonstrate growth potential through acquisitions, aiming to become a global logistics firm akin to DHL operator Deutsche Post AG.
It bought Australian logistics firm Toll Holdings Ltd for A$6.5 billion ($4.9 billion) but had to write down much of the acquisition. Talks to buy Nomura Real Estate Holdings Inc ended earlier this year after failing to agree terms.
"Japan Post cannot expect to realize strong growth on its own, it needs to pursue acquisitions. Management should not be timid about them even after the failure of the Toll deal," said a ruling-party lawmaker, who is influential over a firm still 80 percent owned by the government. The lawmaker declined to be identified to speak candidly about the matter.
Japan Post's chief executive has said the firm can achieve growth through organic means alone.
The latest sale, including extra shares to cover strong demand, would be equivalent to 22 percent of Japan Post's outstanding stock, worth about 1.3 trillion yen ($12.1 billion) based on Monday's closing share price of 1,321 yen. The IPO price was 1,400 yen.
The offer price will be set from Sept. 25 to Sept. 27.
Analysts said the pricing might be affected by the sheer size of the offering being difficult for the market to absorb. The offering is worth about 60 percent of total funds raised in Japan's equity market in 2016, Thomson Reuters data showed.
Japan Post also said on Monday it will separately buy back up to 100 billion yen worth of shares from the government.
About 80 percent of IPO shares were offered domestically, of which 95 percent were sold to retail investors.
Of particular appeal to retail investors is Japan Post's relatively high dividend yield, market participants said. The yield was 3.79 percent at close of trade on Monday versus 1.8 percent for the benchmark average, Thomson Reuters data showed.
"Still, I think investors would rather choose Tokyo Electron Ltd, which has higher growth expectations," said Takato Tanikawa, fund manager at Bayview Asset Management, referring to a chip-making equipment maker whose yield is 3.2 percent.
"There are many other stocks with solid fundamentals and similar dividend yields," he said.
Goldman Sachs, Nomura Securities and Daiwa Securities are global coordinators for the offering. ($1 = 108.5100 yen)
(Reporting by Taiga Uranaka and Chris Gallagher; Additional reporting by Yoshiyuki Osada and Marika Tsuji; Editing by Christopher Cushing and Edwina Gibbs)