Japanese state-owned conglomerate Japan Post revealed plans to sell 168 million shares in its subsidiary Japan Post Insurance in an offering worth JPY409bn ($3.7bn).
Image: Japan Post to sell about 168 million shares in Japan Post Insurance. Photo: courtesy of Kevin Shoemaker/Wikipedia.org.
Japan Post said that it eventually intends to dispose of its entire stake in the Japanese life insurance company. Initially, the conglomerate will look to bring down its equity stake in Japan Post Insurance in multiple stages to nearly 50%.
The conglomerate said that it will use the funds generated by the sale of the shares for the purpose of improving its corporate value and other matters.
As part of the plan, 168,108,700 shares in the life insurance company will be sold by means of an offering through purchase and underwriting by underwriters and international offering. The price of the shares in the Japanese life insurer will be determined by the conglomerate between 15 April and 17 April 2019.
The conglomerate will offer up to 16,891,300 shares in the insurance company, which will be borrowed by a Japanese underwriter (designated Japanese underwriter) and sold in the country. The decision in this regard was taken by the group based on the present demand for the Japanese offering by means of purchase and underwriting by the underwriters.
Japan Post, in a statement, said: “In such a case, the Company will grant the Designated Japanese Underwriter an option to purchase additional shares of common stock of JAPAN POST INSURANCE Co., Ltd. (the “Green Shoe Option”) up to the number of shares in the offering by way of over-allotment.
“Upon exercise of the Green Shoe Option, the Company will sell to the Designated Japanese Underwriter the shares of common stock of JAPAN POST INSURANCE Co., Ltd. held by it equal to the number of shares acquired by the exercise.”
Launched in 2007, Japan Post Insurance offers insurance services to individual customers through Japan Post’s nationwide network of post offices and to corporate customers through sales offices managed by the company.
In 2018, Japan Post entered into a deal to acquire a stake of about 7% in US insurance company Aflac for JPY270bn ($2.4bn). A subsidiary of the Japanese conglomerate has been offering cancer products of Aflac in Japan through 20,000 plus postal outlets and also through Japan Post Insurance and its 76 sales offices.