Nomura Holdings Inc. (8604), Japan’s largest brokerage, plans to sell shares of regional bank Ashikaga Holdings Co. in an initial public offering as early as this year, two people familiar with the deal said.
Ashikaga may begin trading on the Tokyo Stock Exchange as early as December with a market value of 200 billion yen ($2.5 billion) to 300 billion yen, said the people, declining to be identified as the information is private. Nomura, which owns 46 percent of the Tochigi-based lender, hasn’t decided how much it will seek to raise, they said.
The IPO would mark Nomura’s second attempt to divest its stake in the bank after postponing an IPO in 2010, when the European debt crisis roiled markets worldwide. Nomura is accelerating sales of private-equity investments to boost profit as Europe’s woes continue to hamper earnings growth.
“We are preparing for an IPO, watching the market circumstances and aiming to list the shares at an early stage,” said Ikumasa Kobayashi, a spokesman at Ashikaga. He declined to comment on the timing and size of the transaction. Keiko Sugai, a Tokyo-based spokeswoman for Nomura, declined to comment.
Ashikaga hired Nomura as the lead manager of the IPO and may sell new shares in addition to existing stock, the people said. The regional bank may delay the listing until next year, depending on market conditions, they said.
Nomura shares fell 1.5 percent to 269 yen at the 3 p.m. close of Tokyo trading. They have climbed 15 percent this year.
Funds raised in Japanese IPOs this year have more than doubled to 32.7 billion yen from a year earlier, according to data compiled by Bloomberg. The Nikkei 225 Stock Average (NKY) rose 19 percent in the first three months this year and has declined 13 percent since then.
Japan Airlines Co. is planning an initial share sale of as much as 1 trillion yen as early as September, people familiar with the situation said in January, marking a revival in Japan’s IPO market, which has only had one offering greater than 1 trillion yen since 1998.
Seibu Holdings Inc., the Japanese rail and hotel operator part-owned by Cerberus Capital Management LP, has hired five banks, including Nomura, for a proposed IPO, a person with knowledge of the matter said this week.
Nomura purchased its Ashikaga stake for 61 billion yen in 2008, when the lender was under government administration, according to Ashikaga’s regulatory filings. Nomura has also invested about 59 billion yen in preferred shares and debt.
The investment bank’s private-equity business posted a 30 percent gain in the year ended March 31 as net income fell 60 percent to 11.6 billion yen.
“The deal would help Nomura’s earnings, adding fees for the underwriting and retail sale in addition to booking capital gains,” said Takehito Yamanaka, a Tokyo-based analyst at Credit Suisse Group AG. “Reducing risky assets is also meaningful, giving them more freedom to manage their balance sheet.”
Recent Nomura divestitures include the sale of Japanese family restaurant chain Skylark Co. to Bain Capital LLC for 128 billion yen in October and Tsubaki Nakashima Co., bearing and machine tool maker, to Carlyle Group LP in March 2011. Nomura’s private equity-related investments totaled 221.3 billion yen at the end of March, according to earnings presentation material released last month.
Ashikaga’s net income rose 7.4 percent to 17.2 billion yen for the year ended March 31, the lender said on May 11. It boosted deposits by 4 percent and lending by 5 percent in the fiscal year. The bank, based in Tochigi prefecture about 70 miles (113 kilometers) north of Japan’s capital, filed for bankruptcy in 2003 and was delisted from the Tokyo Stock Exchange the following year.
The bank employs 2,800 people and has 150 branches. It had deposits of about 4.7 trillion yen as of March 31 and had 41 percent of the lending market in its home prefecture in 2011. Honda Motor Co. (7267), Nissan Motor Co. (7201) and Canon Inc. (7751) have factories in Tochigi, which has a population of about 2 million.
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