SoftBank has priced the initial public offering of its mobile business at ¥1,500 per share and will raise ¥2.65tn ($23.5bn), sticking with the single indicative price given earlier this month.
The pricing, detailed in a regulatory filing on Monday, came less than a week after millions of SoftBank’s Japanese customers were left for hours without use of the mobile network because of a software glitch traced to one of the company’s main suppliers, Ericsson.
The four-hour outage drew furious crowds to SoftBank’s retail outlets in Tokyo and Osaka, and caused many customers to post on social media their plans to switch to alternative carriers.
About 90 per cent of the shares being sold in the IPO are being allocated to retail investors, a balance that prompted the company to take out TV advertisements in an effort to spur national interest.
Brokerage houses — which in some cases sent sales staff door-to-door to pitch the IPO to ordinary Japanese — had indicated in recent weeks that the campaigns had served their purpose and that the issue was comfortably covered.
But the IPO has been overshadowed by the spiralling international controversy over Chinese equipment producer Huawei and the arrest of its chief financial officer in Canada. In the wake of that arrest, the Japanese government is considering steps that could ultimately see Huawei products banned from government procurement.
Among Japan’s mobile carriers, SoftBank has the highest-profile relationship with Huawei, with founder Masayoshi Son an early fan of the Chinese group and a user of Huawei equipment in its network. On Monday SoftBank said that was closely watching the Japanese government’s policy and would comply with its recommendations when it came to choosing a vendor for its next generation 5G networks.
The IPO of SoftBank’s mobile business, which will include the sale of an overallotment tranche of 160m shares and value the company at ¥7.2tn ($64bn), will be Japan’s biggest. However, it falls slightly short of the world’s largest, the $25bn New York listing in 2014 of Chinese ecommerce giant Alibaba.
The shares will begin trading on December 19, and some analysts anticipate significant volatility in the weeks that follow as the major indices adjust to accommodate the new issue.
The ¥1,500 share price matched the number SoftBank gave earlier this month. In a first for Japan, SoftBank did not offer an indicative range — a signal it had received solid interest for a ¥1,500 price that some institutional investors had said looked too high given the probability of a mobile phone price war in Japan.
Retail interest in the issue appears to have been driven by the company’s dividend yield of 5 per cent, which is relatively high compared with other large listed companies and attractive given the negligible returns Japanese receive on their bank savings.
Nevertheless, analysts said there will be obvious clouds hanging over the new shares.
Mr Son’s SoftBank will retain about 66.5 per cent of the newly spun-out mobile business, putting it in the category of listed subsidiaries that are prevalent on the Tokyo Exchange but heavily frowned upon by proponents of better corporate governance because of the perceived risk of conflicts of interest.
Shares in SoftBank closed down 3.5 per cent on Monday at a one-month low, following sharp declines last week due to the mobile network outage.
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