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Japan Post share sale raises $11.5 billion including overallotment
September 27, 2017 / 8:30 AM / a month ago

Japan Post share sale raises $11.5 billion including overallotment

TOKYO (Reuters) - Japan’s government said it has raised 1.3 trillion yen ($11.5 billion) from its sale of Japan Post Holdings Co Ltd stock, including shares sold in the overallotment portion of the deal that was determined on Wednesday.

FILE PHOTO: Japan Post's logo is seen at its headquarters in Tokyo, Japan, January 30, 2017. REUTERS/Kim Kyung-Hoon/File Photo

The offering was the world’s second-biggest share sale so far this year, after Italian bank UniCredit SpA’s $13.7 billion sale in February.

Japan Post priced its offer on Monday at 1,322 yen a share, a discount of 2 percent to that day’s closing share price. That compared with an indicative range of 2 percent to 4 percent.

The total offering was determined on Wednesday after the number of shares set aside to cover additional demand was fixed.

Domestic retail investors were allocated 76 percent of the offering, overseas investors 20 percent and domestic institutional investors 4 percent, lead underwriters said.

A coverage ratio, or demand for shares offered, was about 1.3 times for domestic retail investors, around 2.5 for overseas investors and about 1.5 for domestic institutional investors, Thomson Reuters DealWatch reported.

In addition to the public offering, Japan Post bought back its own shares worth 100 billion yen from the government, bringing total proceeds to the national coffer to 1.4 trillion yen.

The government has said it aims to raise about some 4 trillion yen in sales of shares in Japan Post firms by the 2022 fiscal year to help fund reconstruction of areas devastated by an earthquake and tsunami in 2011.

That implies a further 1.2 trillion yen of share sales sometime in the next five years.

Domestic retail investors, who made up the bulk of buyers, see the owner of ubiquitous post offices as a safe alternative to saving money at banks, analysts said.

Lead underwriters said Japan Post’s relatively high dividend yield - 3.7 percent against the benchmark Nikkei average’s 1.7 - makes the stock an attractive choice for high-street investors.

“It’s better than bank deposits,” said Shigeto Kobayashi, a 73-year-old retiree attending a seminar on the offering, hosted by brokerage houses in Tokyo earlier this month.

“Anyway, the government is the big shareholder, so there are little risks of bankruptcy,” he said.

Reporting by Taiga Uranaka; Editing by Edwina Gibbs and Christopher Cushing

Our Standards:The Thomson Reuters Trust Principles.
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