SoftBank Sets $21 Billion IPO, Skipping Price Range
SoftBank dispensed with a price range and chose to set a single preliminary figure for the $21 billion initial public offering of its Japanese telecom business, according to Bloomberg.
It’s the first time that a stock will debut on the Tokyo Stock Exchange without a range, one of the lead underwriters said. The Japanese technology giant plans to sell shares for 1,500 yen apiece, it said in a filing, the same price that it indicated when announcing the IPO earlier.
At that figure, the IPO would raise at least 2.41 trillion yen ($21 billion). Founder Masayoshi Son and his bankers are betting that they will be able to sell all of the shares in the cash-generating business, which spans wireless, broadband and fixed-line services and has 34 million mobile subscribers. Usually, potential investors are given a range, so that the final price can be adjusted for fluctuations in demand.
An underpriced IPO would raise less cash for the company, and could see the shares jump when trading starts on Dec. 19. On the other hand, an overpriced IPO carries the risk of leaving unsold shares on the table. The final price may still be adjusted, SoftBank said.
Including an option to sell more shares, the offering could climb to as much as 2.65 trillion yen. The Japanese billionaire is transforming his company from a telecom operator into a global tech investor, with stakes in Uber and ARM. SoftBank is looking to tempt investors with a dividend payout ratio of about 85 percent of net income, according to the filing. Based on net income in the latest fiscal year, that would work out to a yield of almost 5 percent.