September 10, 2015 / 2:32 AM / 4 years ago

UPDATE 4-Triple listings for Japan Post behemoths seek to raise $11.5 bln

* Japan Post, bank and insurance units to list on Nov. 4

* Combined IPOs expected to raise Y1.39 trln - filing

* Each firm to offer about 10 pct of outstanding shares -filing (Adds investor allocations, profit and dividend forecasts)

By Takaya Yamaguchi and Taiga Uranaka

TOKYO, Sept 10 (Reuters) - The listings of Japan Post Holdings Co and its bank and insurance units will seek to raise a combined $11.5 billion - critical offerings the government hopes will win over retail investors and boost the stock market.

The triple IPOs represent Japan’s biggest privatisation in nearly three decades and will bring to market the nation’s largest bank and largest insurance company by assets.

The debut of Japan Post Bank will also subject one of the world’s biggest institutional investors to market forces. The bank has already pledged to overhaul the management of its $1.7 trillion portfolio, potentially having a considerable impact over fund flows into stock and bond markets.

But scepticism abounds over growth prospects for all three companies with both the bank and Japan Post Insurance heavily regulated to protect private sector rivals, while mail services are suffering from declining volume in a digital age.

“I don’t imagine managers of active funds will rush to buy shares of Japan Post companies,” said a fund manager.

“Rather, depending on the dividend yield, those focused on value stocks are likely to be interested, said the person, declining to be identified as his company is owned by a direct competitor to Japan Post Bank.

Around 10 percent of outstanding shares in each company will be offered, with Japan Post Holding’s offering aiming to raise $5.5 billion, while the bank and insurance IPOs will seek $4.8 billion and $1.2 billion respectively.

Japan’s top government spokesman said the share offers were an opportunity to encourage the shift of household money from bank deposits to equity market investment.

“We are hopeful it will lead to a virtuous economic cycle,” Chief Cabinet Secretary Yoshihide Suga told a news conference.

Japan Post Bank will have indicative price of 1,400 yen and have the largest market capitalisation of the three at $52 billion.

The holding company would have a market value of around $50 billion at its indicative price of 1,350 yen. The insurance unit’s tentative price of 2,150 yen would give it a market value of about $11 billion.

Keenly aware of the need for a strong growth scenario to lure investors, Japan Post President Taizo Nishimuro orchestrated the acquisition of Australian freight and logistics firm Toll Holdings for A$6.5 billion ($4.6 billion) this year.

But underscoring concerns about growth prospects, Japan Post Holdings said it expects net profit to slide 20 percent to 370 bill lion yen this financial year.

The bank unit said it expects annual net profit to fall 13 percent while the insurance unit said net income is likely to edge up 3 percent.

In a move likely to help attract retail investors, the holding company said it plans to double its annual dividend to 23 yen per share.

Around 80 percent of the three firm’s IPO allocation will go to domestic investors. A finance ministry official said that 95 percent of the domestic offering will be sold to individuals while all of the overseas portion will go to institutional investors.

Final pricing for the bank and insurance units will take place on Oct. 19, and for the holding company on Oct. 26. All three will make their market debut on Nov. 4.

The offerings will be first of three tranches that together are meant to generate more than $30 billion for reconstruction after the 2011 earthquake and tsunami.

Eleven companies have been hired as lead underwriters for the offerings with Mitsubishi UFJ Morgan Stanley, Nomura Securities, Goldman Sachs and JPMorgan chosen as global coordinators. ($1 = 120.7200 yen) (Reporting by Takaya Yamaguchi and Taiga Uranaka; Additional reporting by Chang-Ran Kim and Chris Gallager; Editing by Edwina Gibbs)

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