Japan Post’s Bank & Insurer IPO’s Priced at ‘Top of Range’

October 19, 2015

State-owned Japan Post on Monday set prices for separate initial public offerings of its bank and insurance arms at the top of their ranges, indicating strong demand from retail investors for businesses valued at a combined $65 billion.

In what will be Japan’s biggest privatization in three decades, the two companies and their parent, Japan Post Holdings Co, are seeking to raise a combined 1.4 trillion yen ($11.8 billion) in a triple IPO set for on Nov. 4. Japan Post Holdings will set its listing IPO price on Oct. 26.

A successful listing of the three Japan Post companies – squarely marketed at the country’s mom-and-pop investment community – is a key plank of a campaign by Prime Minister Shinzo Abe to unlock large stockpiles of household savings stuck in bank deposits, funnel them into domestic equity investments and boost the Tokyo bourse’s liquidity.

Regulatory filings on Monday showed Japan Post Bank Co priced shares in its listing at 1,450 yen [$12.16] apiece, compared with a book-building range of 1,250-1,450 yen [$10.48 – $12.16]. The sale values Japan Post Bank at 6.5 trillion yen in total.

Separately, Japan Post Insurance Co set its IPO price at 2,200 yen [$16.77], compared with its book-building range of 1,900-2,200 yen [$15.93 – $18.45]. At the IPO price Japan Post Insurance’s total valuation is 1.3 trillion yen [$10.9 billion].

In their regulatory filings, the two businesses each said that a “significant number” of subscriptions to their share sale were made at the top of the book-building ranges. They didn’t disclose details of any potential over-subscription levels.

($1 = 119.2300 yen)

(Reporting by Taiga Uranaka; Editing by Chang-Ran Kim and Kenneth Maxwell)

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