Published: Wed, November 14, 2018
IT | By Lester Massey

SoftBank seeks $29b in IPO of Japan mobile unit

SoftBank seeks $29b in IPO of Japan mobile unit

Telecoms giant SoftBank will list shares in its Japanese mobile unit next month in a sale that could raise over $21 billion and be one of the biggest tech IPOs in years.

Under its CEO Masayoshi Son, SoftBank has transformed from its beginnings in software and is increasingly seen as an investment firm.

Using the SoftBank Vision Fund, worth an estimated $100 billion, Son has taken stakes in some of the hottest firms in the tech sector, including Uber, Slack, WeWork and Nvidia. The company needs to cut down mobile bills to comply with new government requests.

The Tokyo Stock Exchange approved the listing of 1.6 billion shares of SoftBank Corp.

SoftBank hopes to lure investors with a dividend payout ratio of about 85 percent of net income.

The domestic and global underwritten offering will include 1.6 billion shares in Softbank Corp sold at a preliminary price of JPY 1,500 each. "Rakuten's entry will also increase competition", said Takashi Nakamura, senior strategist at Tokai Tokyo Research Institute. Based on net income in the last fiscal year, that would work out to an nearly 5 percent yield at the indicated IPO price. "That provides an incentive". The market valuation is set to become the largest since Japan Post Holdings Co. debuted in 2015 at 7.34 trillion yen with its opening price.

After the public listing, Softbank Group, the parent, is to hold about 63 percent of the wireless unit.

The IPO price range will be set on Nov 30, followed by the final price on Dec 10. SoftBank has picked Nomura Holdings Inc., Goldman Sachs Group Inc., Deutsche Bank AG, Mizuho Financial Group Inc., JPMorgan Securities and Sumitomo Mitsui Financial Group Inc. among joint global coordinators. More than 80 percent of the shares will be offered to domestic retail investors, a person with knowledge of the matter told Reuters.

A journalist raises her hand to ask a question to Japan's SoftBank Group Corp Chief Executive Masayoshi Son during a news conference in Tokyo, Japan, November 5, 2018.

Earlier this month, Son condemned the killing but said he would continue to do business with Saudi Arabia.

In a statement published on its website, SoftBank described today's move as an important step in its transformation from telecom operator into a major investment company and said it would provide greater clarity for the market. If things go really well it could even challenge Alibaba for the biggest ever IPO, which would come in handy for a group that is especially exuberant in its spending.

By listing the domestic carrier business, SoftBank is seeking to concentrate on its global investments and give investors a choice to decide between a stable mobile business and a more risky investment business.

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