Triple listings for Japan Post behemoths seek to raise $11.5B
The listings of Japan Post Holdings and its bank and insurance units will seek to raise a combined $11.5 billion - critical offerings the government hopes will win over retail investors and boost the stock market.
The triple IPOs represent Japan's biggest privatization in nearly three decades and will bring to market its largest bank, which is also one of the world's biggest institutional investors, as well as the nation's largest insurance company by asset size.
But skepticism abounds over growth prospects for all three companies with both Japan Post Bank and Japan Post Insurance subject to heavy regulation to protect private sector rivals, while mail services are suffering from declining volume in an Internet age.
"I don't imagine managers of active funds will rush to buy shares of Japan Post companies," said a fund manager.
"Rather, depending on the dividend yield, those focused on value stocks are likely to be interested, said the person, declining to be identified as his company is owned by a direct competitor to Japan Post Bank.
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Around 10 percent of outstanding shares in each company will be offered, with Japan Post Holding's offering aiming to raise $5.5 billion, while the bank and insurance IPOs will seek $4.8 billion and $1.2 billion respectively.
Japan Post Bank will have indicative price of 1,400 yen, giving it the largest market capitalization of the three at $52 billion.
The holding company would have a market value of around $50 billion at its indicative price of 1,350 yen. The insurance unit's tentative price of 2,150 yen would give it a market value of about $11 billion.
Final pricing for the bank and insurance units will take place on Oct. 19 and on Oct.26 for the holding company.
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All three firms' shares are scheduled to debut on the Tokyo Stock Exchange on Nov. 4.
Keenly aware of the need for a strong growth scenario to lure investors, Japan Post President Taizo Nishimuro orchestrated the acquisition of Australian freight and logistics firm Toll Holdings for A$6.5 billion ($4.6 billion) this year.
He has also said Japan Post Bank would start to overhaul the management of its $1.7 trillion portfolio.
The offerings will be first of three tranches that together are meant to generate more than $30 billion for reconstruction after the 2011 earthquake and tsunami.
Eleven companies are hired as lead underwriters for the offerings with Mitsubishi UFJ Morgan Stanley, Nomura Securities, Goldman Sachs and JP Morgan chosen as global coordinators.