Cerberus Capital Management LP will raise as much as 146.1 billion yen ($1.7 billion) selling shares in Aozora Bank Ltd. (8304) as the U.S. private equity firm ends its nine-year stint in control of the Japanese lender.
The investment company plans to sell the shares for 231 yen each, Tokyo-based Aozora Bank said in a statement yesterday. The price is 3.4 percent lower than yesterday’s 239 yen close on the Tokyo Stock Exchange. Aozora stock, which more than doubled in the past four years, slid 2.9 percent to 232 yen at 1:07 p.m.
Cerberus, which oversaw a turnaround at Aozora including eight years of profit and a 2006 initial public offering, pares its investment as the bank prepares to pay back a taxpayer bailout, repurchase shares and boost dividends. The sale would raise less than the 158.1 billion yen the shares were worth at the close on Jan. 7, when the bank announced the deal.
The private equity company plans to sell as many as 632.5 million shares, according to the Jan. 7 statement by Aozora. As many as half of the shares will be offered to overseas investors. New York-based Cerberus will cut its voting rights to 7.7 percent from 57.8 percent.
Citigroup Inc. (C:US) and Morgan Stanley are coordinating the global offering. Goldman Sachs Group Inc. and Barclays Plc are helping to manage the overseas portion as Daiwa Securities Group Inc. and Mitsubishi UFJ Financial Group Inc. work on the domestic sale, Aozora said last week.
Cerberus, founded by Stephen Feinberg, lost a bid to gain control of Aozora in 2000, before succeeding in 2003 when it bought a stake held by mobile carrier Softbank Corp. (9984) The lender’s predecessor, Nippon Credit Bank, failed in 1998 as bad loans mounted following the collapse of the nation’s asset bubble. After being temporarily nationalized, the bank was privatized in 2000.
Aozora, which means “blue skies” in Japanese, has since made a profit in every fiscal year except the 12 months ended March 2009, when the global financial crisis triggered a worldwide recession. It repaid 127.4 billion yen to the government when it listed on the Tokyo Stock Exchange in November 2006, after raising 351 billion yen from the IPO.
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