The Tokyo Stock Exchange on Friday underlined its determination to become a listed company by announcing lead managers for an initial public offering that could take place as early as December 2008.
The next step towards listing is likely to provoke further overtures from foreign bourses eager to take a stake in the group after flotation.
The TSE has already agreed to a possible future capital tie-up with the New York Stock Exchange, as part of a strategic alliance unveiled in January. But Taizo Nishimuro, outgoing TSE president, said recently that other exchanges had made similar proposals.
The exchange on Friday encouraged would-be merger partners by revealing that it had told aspiring lead managers they would be picked partly for M&A expertise.
Mr Nishimuro has always ruled out the idea of the exchange as junior partner of any merger. But he said on Friday: “It’s possible there will be mergers in the future.”
At a press conference, Mr Nishimuro said the exchange had chosen two Japanese securities houses and one western house from among 11 bidders.
Nomura and Daiwa were picked several years ago for the TSE’s previous aborted mission to list in 2004.
But in a sign the TSE is looking for international as well as domestic shareholders, it also chose Morgan Stanley.
Morgan Stanley has a record as investment banker for exchanges. It is advising Sweden’s OMX, subject of a $3.7bn bid by Nasdaq, and Intercontinental Exchange, which is attempting a $10.9bn takeover of the Chicago Board of Trade.
The TSE would not say on Friday what percentage of the exchange would be sold by IPO or give a figure for the exchange’s post-IPO value.
But investment bankers unconnected with the deal said the TSE would be unlikely to sell less than $1bn-worth of shares.
Net income in the year to March was Y20bn ($165m).
The deal would give the exchange’s IPO market a boost. The value of IPOs on the TSE was only Y1,252bn last year, tiny compared with other big exchanges.
Friday’s news was a blow to Nikko Citigroup, which was one of the 2004 lead managers but was dumped in favour of Morgan Stanley.
Nikko Citigroup is 51 per cent-owned by Nikko Cordial, the Japanese brokerage that narrowly escaped delisting from the TSE after being hit by an accounting scandal last year.