TOKYO/HONG KONG, Sept 20 (Askume) – Japan’s Tokyo Metro and Rigaku on Friday began proceedings for a $3.1 billion initial public offering (IPO) next month, according to term sheets.
Tokyo Metro aims to raise 320 billion yen ($2.23 billion), making it Japan’s biggest IPO in six years, while Carlyle Group-backed X-ray testing equipment maker Rigaku aims for an IPO worth $126 billion, a term sheet showed.JPY.
If both deals succeed in raising the targeted amounts, the value of Japan’s initial public offerings will more than double by now in 2024, London Stock Exchange data showed.
According to LSEG data, Japanese IPOs so far this year amount to US$1.5 billion, down by about 55% compared to the same period last year.
On the other hand, data shows that total equity capital market activity so far in 2024 has reached $28.2 billion, an increase of 18.4%, driven by an increase in follow-on financing and convertible bond transactions.
By comparison, in the Asia-Pacific region, which includes Japan, ECM activity has fallen 24% so far this year and IPO prices have dropped 59% as the pace of global interest rate changes remains uncertain and geopolitical risks remain high, data showed.
Japanese stocks suffered a historic decline in early August on unexpected interest rate hikes and US recession worries, before recovering losses. The benchmark index (.N225) has fallen by 1.6% so far this year.It has increased by about 13%.
Tokyo Metro said on Friday it plans to list on the Tokyo Stock Exchange on Oct. 23, the latest listing by a major Japanese rail operator.
Tokyo Metro’s indicative price of 1,100 yen per share would raise 319.55 billion yen, giving the company a market capitalization of 639.1 billion yen.
The central government, which owns 53.4% of Tokyo Metro’s shares, and the Tokyo government, which holds the remaining 46.6%, plan to sell half of their shares in the public offering, with subscription ending on Oct. 11.
The history of the Tokyo Metro can be traced back to 1920, when the Tokyo Underground Railway Company was founded. Seven years later, it opened Japan’s first subway line between the Asakusa and Ueno districts in Tokyo.
The central government plans to use the proceeds from the IPO to repay reconstruction bonds issued after the 2011 earthquake and tsunami. The joint global coordinators of the IPO are Goldman Sachs, Mizuho and Nomura Securities.
Separately, Rigaku, an X-ray testing equipment maker backed by Carlyle Acquisition Corp (CG.O), plans to go public on Oct. 25, according to a term sheet seen by Askume . The IPO order book will open on Oct. 10.
According to the term sheet, the IPO will raise more than 126.1 billion yen, including over-allotment options, and the company’s market value is expected to reach 284.1 billion yen after issuance.
If the over-allotment is included, Carlyle’s shareholding ratio will fall from 75.5% to 40.7%.
The joint global coordinators for the Rigaku IPO are Bank of America, J.P. Morgan, Morgan Stanley and Nomura.
(1 USD = 143.8200 yen)
