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Nikko Asset's $590 million IPO shelved on weak market
December 2, 2011 / 8:21 AM / 6 years ago

Nikko Asset's $590 million IPO shelved on weak market

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TOKYO (Reuters) - An initial public offering of Japan’s Nikko Asset Management that looked set to raise 45.5 billion yen ($586 million) for its main shareholder was shelved on Friday due to weak market conditions and the worsening debt crisis in Europe.

Sumitomo Mitsui Trust Holdings (8309.T), which owns most of Nikko Asset, called off the offering on the day price guidance for the new stock was due to be announced.

“After we launched the offering, the debt crisis in Europe expanded and market conditions worsened more than we had expected,” Sumitomo Mitsui Trust said in a statement.

The cancellation, which follows two earlier aborted attempts to list, comes as Japan’s large money managers, such as Nomura Holdings Inc (8604.T) and Kokusai Asset Management, have cut their holdings of European sovereign debt.

Investors also remain cautious on the outlook for the global stock market as the debt crisis is seen rumbling on.

Underwriters for the IPO, including SMBC Nikko Securities, Nomura Securities and Goldman Sachs (GS.N), had been marketing 54.15 million shares to be sold by Sumitomo Trust & Banking at an expected price of 840 yen per share. There was no plan to sell new shares.

Sumitomo Trust, a unit of Sumitomo Mitsui, bought Nikko Asset from Citigroup (C.N) in 2009 for 112.4 billion yen ($1.45 billion).

Previous shareholders of Nikko Asset abandoned an attempt in 2006 to sell their shares in the money manager.

In contrast, online gaming firm Nexon Co is continuing to market shares for a more than $1 billion initial public offering, the largest such IPO since drugmaker Otsuka Holdings (4578.T) raised about 160 billion yen in December 2010.

Nexon is expected to set pricing on Monday after indicating a range between 1,200 yen and 1,400 yen last month.

Reporting by Junko Fujita and Chikafumi Hodo; Editing by Joseph Radford and Michael Watson

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