SoftBank is said to get 1.3t yen in wireless stock orders

[TOKYO] SoftBank Group's bankers have received orders for all 1.3 trillion yen (S$16.43 billion) of the domestic wireless unit's stock they are selling and will probably place an over-allotment, according to people familiar with the matter.

SoftBank order books for domestic and overseas investors were fully covered Tuesday with Nomura Holdings and Daiwa Securities Group leading the distributions, said the people, asking not to be identified because the matter is private. Local and international investors were drawn by the dividend yield at the latest price, which is lower than the initial public offering price of 1,500 yen in 2018, the people said. Final pricing for the sale will be as early as Sept 14.

SoftBank Group shares have tumbled this week after the conglomerate made massive bets on technology stocks using derivatives, only to see a sharp decline in the sector in recent days. The Tokyo-based company's stock dropped as much as 7.1 per cent Wednesday, but recovered to close 2.9 per cent lower after Bloomberg's report.

Founder Masayoshi Son said in August SoftBank Group planned to sell about a third of its stake in the domestic wireless operation, adding to plans for asset sales of about 4.5 trillion yen. Mr Son has used the cash he's raised to embark on a record 2.5 trillion yen in repurchases of the company's own shares, lifting the parent company's stock after investment missteps and setbacks from the coronavirus fallout.

The potential domestic over-allotment is slightly more than 100 million shares, which would bring in about 134 billion yen at Wednesday's price. Mizuho Financial Group, Bank of America and JPMorgan Chase & Co are also coordinators on the deal.

Mr Son's many asset sales have put him in the unusual position of having excess cash. Separate from the SoftBank Corp offering, the parent company has offloaded US$13.7 billion of Alibaba Group Holding stock and a stake in T-Mobile US for about US$20 billion. Mr Son has also said that he is looking to sell or take public Arm, the chip design firm that he bought four years ago for US$32 billion, and Bloomberg reported in August that Nvidia is in advanced talks to acquire the business.

With all the money coming in, Mr Son unveiled a new asset management arm that would invest in public securities. SoftBank Group later disclosed about US$3.9 billion of investments into 25 of the world's largest technology companies including Amazon.com, Tesla, Netflix and Alphabet. It did not disclose details of its derivative stakes.

SoftBank said it is expanding its cash reserves beyond the asset sales already announced "to ensure flexible options to respond to changes in the market environment". The company cited "the ongoing uncertainty in the market environment due to concerns about a potential second or even third wave of Covid-19."

BLOOMBERG