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Japan government launches $12 billion follow-up sale of Japan Post Holdings shares

Reuters  |  TOKYO 

By Taiga Uranaka and Chris Gallagher

TOKYO (Reuters) - The Japanese said it will sell additional in Holdings Co Ltd worth around $12 billion, but the offering is expected to struggle to attract healthy demand from institutional investors due to lack of a strong growth story.

Post, with a network of 24,000 offices and workforce of 400,000 people, has been hurt by a constant decline in mail delivery volume. Its two financial units Bank Co Ltd and Insurance Co Ltd have been hurt by the nation's ultra-low interest rate environment.

The sale - the first since its postal and financial giant's mammoth IPO in 2015 which also raised about $12 billion - also comes in the wake of M&A missteps.

It had to write down much of its acquisition of A$6.5 billion ($4.9 billion) Australian logistics company Toll Holdings Ltd and this year scrapped plans to buy Nomura Real Estate Holdings Inc after failing to agree on terms.

Including options to sell additional in the event of strong demand, the sale could be equivalent to 22 percent of Post's outstanding and worth around 1.3 trillion yen ($12.1 billion) based on Monday's closing share price of 1,321 yen.

"The company lacks appeal in growth potential. I don't think there will be strong demand from actively managed funds," said Kazuo Okabe, general manager at Fukoku Capital Management.

The price will be determined between Sept. 25 and Sept. 27, the filing showed.

also said it will buy back worth up to 100 billion yen.

The has said it eventually plans to raise $36 billion through the sale of in and its two financial units, partly to fund reconstruction of areas in northern hit by a catastrophic 2011 earthquake and tsunami.

($1 = 108.5100 yen)

(Reporting by Taiga Uranaka and Chris Gallagher; Additional reporting by Yoshiyuki Osada and Marika Tsuji; Editing by Christopher Cushing and Edwina Gibbs)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, September 11 2017. 14:14 IST