| TOKYO, July 31
TOKYO, July 31 Japanese regional lender Ashikaga
Holdings Co Ltd, owned by a Nomura-led group of investors, has
applied to list on the Tokyo Stock Exchange in what could be a
$1 billion share offer before the end of the year, two sources
close to the deal said.
Japan's regional banks have long faced harsh prospects, as
local economies outside the big urban centres have borne the
brunt of decades of deflation.
But the sources said Prime Minister Shinzo Abe's
reflationary policies and a recent stock market rally had
encouraged Ashikaga's owners to seek a listing.
Ashikaga Bank was purchased by a unit of Nomura Holdings
, which holds a 45.5 percent stake, venture capital firm
Jafco Co Ltd and others in 2008 for 120 billion yen
($1.22 billion). As part of the deal, the buyers agreed to put
an additional 160 billion yen into the bank's capital as it
emerged from a government bailout.
Ashikaga Bank, based in Tochigi Prefecture north of Tokyo,
had consolidated net assets of 211.7 billion yen as of March
2013, while the parent holding company had 279.3 billion yen.
The bank was nationalised in 2003 in a government rescue as
it suffered, like other regional banks, from a stagnant economy
hit by a declining population. The holding company was formed
after the Nomura-led purchase.
One banking sector analyst said that, calculating from the
average price book ratio and return on equity for Japanese
regional banks, Ashikaga Holdings could be valued as high as 250
It was not clear how much of the company might be put up for
sale by the shareholders and much would depend on market
conditions, the sources said. However the initial public
offering (IPO) could be worth well over 100 billion yen if the
majority of shareholders take advantage of what is seen as a
long-delayed opportunity to exit their investment, they said.
Tokyo's benchmark Nikkei average is up nearly 60
percent in the almost nine months since expectations Abe would
weaken the yen and revive the economy triggered a surge in share
prices and spurred several large IPOs, including last month's
nearly $4 billion offering by Suntory Beverage and Food Ltd
An Ashikaga Bank spokesman declined to comment on whether a
listing application had been submitted but reiterated the
company's statement in May as part of a mid-term management plan
that a stock market listing was among its objectives.
It typically takes two to three months for the exchange to
approve an application, and an IPO can follow within weeks after
($1 = 98.0550 Japanese yen)
(Writing by Edmund Klamann; Editing by Pravin Char)