Softbank Group Corp’s ￥2.4 trillion (US$21 billion) initial public offering (IPO) of its Japanese telecommunications unit has successfully secured sales for the bulk of its shares to individual investors, people familiar with the matter said.
The lead underwriters, which had set a target of about ￥2 trillion of retail sales, have received enough reservations at about the indicated price of ￥1,500, said the people, who asked not to be identified because the information is not public.
One brokerage completed half of its volume at a retail branch on the first day, they said.
Softbank shares added to gains and rose as much as 3.9 percent to ￥9,597 in Tokyo, the highest intraday price in more than a month.
Rivals NTT Docomo Inc and KDDI Corp fell to session lows.
Softbank is to announce the price range for the offering today, following a campaign to whip up public interest in the IPO of the wireless unit, which will be a new entity named Softbank Corp.
The issuer’s strong brand, high dividend payout and a plan to split the lots to make the shares accessible to more people helped fuel demand. That might result in a pricing range higher than ￥1,500, the people said.
If there is enough demand to satisfy the overallotment of shares, Softbank might succeed in selling as much as ￥2.6 trillion of shares, putting it on track to exceed the record market debut in Japan of former national carrier Nippon Telegraph & Telephone Corp in 1987.
Representatives from Softbank and the brokerages declined to comment on retail-investor demand and the price range.
Joint domestic lead underwriters include Nomura Holdings Inc, Daiwa Securities Group Inc, Mizuho Financial Group Inc, Sumitomo Mitsui Financial Group Inc, Mitsubishi UFJ Morgan Stanley Securities Co and SBI Securities Co.
The underwriters’ efforts began with an unusual TV marketing campaign aimed at a broad range of potential investors. The commercials are to run through today.
Softbank and one underwriter, Mizuho, also rolled out a plan to use a smartphone-based brokerage that they back to sell shares. That would let people buy 1 share at the indicated price of ￥1,500 apiece, instead of the usual minimum block of 100 shares for ￥150,000, according to the prospectus.
The IPO will probably be harder to sell to foreign investors, Bloomberg Intelligence analyst Anthea Lai said.
Softbank might struggle to hold on to wireless subscribers if Web retailer Rakuten Inc enters the market with an attractive unlimited data plan, Sanford C. Bernstein & Co analyst Chris Lane said in a recent report.
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