SoftBank IPO seeks $18 billion from retail investors

SoftBank Group Corp. is seeking to raise a record ¥2 trillion ($18 billion) from Japanese individuals in the initial public offering of its mobile phone unit, targeting investors who often get no interest on their savings, sources have said.

Nomura Holdings Inc., a joint global coordinator, will sell the biggest part of the shares to the retail investors, part of an IPO that could raise about ¥3 trillion in total, said the people, asking not to be named because the target is private. Tokyo-based SoftBank will announce the details for the debut sale as early as next week, they said.

The amount of IPO stock allocated to individuals varies from country to country — and indeed from offering to offering — with institutions often taking a majority and retail investors settling for the leftovers. SoftBank’s target suggests the company’s bankers anticipate strong demand from Japan’s yield-starved individuals. Chief Executive Officer Masayoshi Son plans to pay healthy dividends to attract investors.

“Japanese individuals are interested in SoftBank shares as it’s topical and they can anticipate high dividends,” said Kazumi Tanaka, an IPO analyst at DZH Financial Research Inc. in Tokyo. “It won’t be impossible for the underwriters to sell the shares to households, even those who haven’t done stock trading.”

The size of the IPO may change or the listing could be delayed if there are further disruptions in the market, the people said. The 225-issue Nikkei average has fallen about 7 percent since October, and rival NTT Docomo Inc. set off a plunge in wireless operator shares last week by saying it may cut phone rates by up to 40 percent after Japan’s government pressed for reductions.

Representatives at SoftBank and Nomura declined to comment on the details for the IPO.

The size of the sale to retail investors would be a record in Japan, exceeding the IPOs for Japan Post Holdings Co. in 2015 and NTT Docomo Inc. in 1998, which each raised about ¥1 trillion from individuals, according to data compiled by Bloomberg.

The company is seeking to sell about ¥2.5 trillion to ¥3 trillion of shares in the mobile unit, whose market value would be about ¥8 trillion, the people said. The mobile operator plans to start marketing this month and list the shares on the Tokyo Stock Exchange on Dec. 19.

Domestic and foreign brokerages advertised heavily during Japan’s baseball championship, which was won by the Fukuoka SoftBank Hawks. Nomura and other finance giants spent big at Fukuoka’s stadium to put their brands into front of the teams fans — and Son who attended to cheer on his team.

Earlier this week, Son told reporters SoftBank will cut the number of employees at the wireless unit by about 40 percent over the next two or three years to boost its profitability, shifting the employees to new business areas.

“Many people are starting to evaluate the high dividends and profit growth, and how that will affect the IPO price,” Son said at a news conference on Monday.

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