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Japan Post said to pay underwriters US$191 million in fees for IPO

A man walks past an advertising poster in the headquarters of Japan Post in Tokyo.

[TOKYO] Japan Post Group's underwriters are set to earn about 23 billion yen (S$269.3 million) in fees for managing the world's biggest initial public offering since Alibaba Group Holding Ltd's 2014 share sale, according to people with knowledge of the matter.

Managers of the 1.4 trillion-yen IPO will get 1.7 per cent fees for the retail tranche and 1.5 per cent for the portion sold to institutional investors, one of the people said, asking not to be named because the information is private. That works out to a 1.64 per cent average fee, according to calculations by Bloomberg.

The state-owned postal giant is paying the lowest fee, expressed as a percentage of deal size, on record for a major IPO in Japan and less than half the average for first-time offers in the country since 2010, data compiled by Bloomberg show.

Large IPOs and sales of government assets tend to generate lower fees. E-commerce giant Alibaba paid 1.2 per cent fees for its US$25 billion offering a year ago, Bloomberg-compiled data show.

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Japan Post Holdings Co and its banking and insurance units are set to list on the Tokyo Stock Exchange on Nov 4 following the IPO, the nation's biggest since 1998. Companies going public in Japan on average paid 3.8 per cent in underwriter fees since the start of 2010, according to data compiled by Bloomberg.

Nomura, Mitsubishi UFJ Nomura Holdings Inc and Mitsubishi UFJ Morgan Stanley Securities Co are responsible for selling almost half the stock, people familiar with the matter said last week. Goldman Sachs Group Inc and JPMorgan Chase & Co are also global coordinators of the deal.

Spokesmen for Japan Post and the four brokerages declined to comment, as did Finance Ministry officials. The total fees are based on indicative prices announced last week and the amount may change depending on book building and pricing, the people said.  

Daiwa Securities Group Inc, SMBC Nikko Securities Inc. and Mizuho Securities Co. are among more than 50 other firms underwriting the sales. Japan Post is targeting individual investors for at least 70 per cent of the IPO, people with knowledge of the matter said last week.