SoftBank IPO seeks record two trillion yen from retail investors

Tokyo

SOFTBANK Group Corp is seeking to raise a record two trillion yen (24.2 billion) from Japanese individuals in the initial public offering of its mobile phone unit, targeting investors who often get no interest on their savings, said people familiar with the matter.

Nomura Holdings Inc, a joint global coordinator, will sell the biggest part of the shares to the retail investors, part of an IPO that could raise about three trillion yen in total, said the people, asking not to be named because the target is private. Tokyo-based SoftBank will announce the details for the debut sale as early as next week, they said.

The amount of IPO stock allocated to individuals varies from country to country - and indeed from offering to offering - with institutions often taking a majority and retail investors settling for the leftovers. SoftBank's target suggests the company's bankers anticipate strong demand from Japan's yield-starved individuals. Chief executive officer Masayoshi Son plans to pay healthy dividends to attract investors.

"Japanese individuals are interested in SoftBank shares as it's topical and they can anticipate high dividends," said Kazumi Tanaka, an IPO analyst at DZH Financial Research Inc in Tokyo. "It won't be impossible for the underwriters to sell the shares to households, even those who haven't done stock trading."

The size of the IPO may change or the listing could be delayed if there are further disruptions in the market, the people said. The Nikkei 225 Stock Average has fallen about 7 per cent since October, and rival NTT Docomo Inc set off a plunge in wireless operator shares last week by saying it may cut phone rates by 40 per cent after Japan's government pressed for reductions.

Representatives at SoftBank and Nomura declined to comment on the details for the IPO.

The size of the sale to retail investors would be a record in Japan, exceeding the IPOs for Japan Post Holdings Co in 2015 and NTT Docomo Inc in 1998, which each raised about one trillion yen from individuals, according to data compiled by Bloomberg.

SoftBank has picked Nomura, Goldman Sachs Group Inc., Deutsche Bank AG, Mizuho Financi Group Inc and Sumitomo Mitsui Financial Group Inc among joint global coordinators, it was reported last month.

The company is seeking to sell about 2.5 trillion to three trillion yen of shares in the mobile unit, whose market value would be about eight trillion yen, the people said. The mobile operator plans to start marketing this month and list the shares on the Tokyo Stock Exchange on Dec 19.

Earlier this week, Mr Son said SoftBank will cut the number of employees at the wireless unit by about 40 per cent over the next two or three years to boost its profitability, shifting the employees to new business areas. "Many people are starting to evaluate the high dividends and profit growth, and how that will affect the IPO price," he said. BLOOMBERG