Rakuten Bank prices shares at 1,400 yen in IPO, top of range
RAKUTEN Bank and its main shareholder priced shares at 1,400 yen each in Japan’s largest initial public offering (IPO) in five years, marking the top of a target range that had been lowered earlier this month.
About 83.3 billion yen (S$828.4 million) was raised through the sale of shares in the banking unit of billionaire Hiroshi Mikitani’s Rakuten Group, according to a statement on Thursday (Apr 13). Even with the lower-than-originally-expected price, the listing is the largest in Japan since the US$20 billion-plus IPO of SoftBank in December 2018.
The offering comes amid high volatility for banking stocks globally, after the failures of several US lenders and turmoil at Credit Suisse.
It also comes on the heels of the IPO of fellow online lender SBI Sumishin Net Bank, which has risen 38 per cent since its debut in Tokyo last month.
“Not surprised at the pricing as, at the revised IPO range, the stock was attractively priced,” said Sumeet Singh, head of equity research, IPOs and placements at Aequitas Research. “The company still offers a substantial discount to where the recently listed SBI Sumishin Net Bank has been trading.”
Rakuten Bank initially set an indicative price band of 1,630 to 1,960 yen. It then lowered that to a range of 1,300 to 1,400 yen, suggesting weaker-than-expected demand. The offer comprises roughly 60 million shares, with an over-allotment of 4.5 million.
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The listing is part of Rakuten Group’s plan to expand its financial business. Stiff competition from Amazon has capped its core e-commerce revenues, while aggressive promotions for its struggling mobile unit have saddled the company with losses.
Rakuten cut Mikitani’s salary by almost 40 per cent last year. Investors and creditors have voiced concern over the viability of the company’s foray into the Japanese mobile market, with the country’s dominant carriers slow to yield coveted spectrum to the new entrant.
Rakuten Group offered up to 84 per cent of shares available in the IPO, and will retain a stake of about 63 per cent in the banking unit after the listing, according to terms of the deal.
The stock is slated to list on the Tokyo Stock Exchange on Apr 21. BLOOMBERG
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