SoftBank fills order book for $12bn sale of wireless unit shares

The Japanese company is selling one third of its domestic wireless unit as part of a broader $42.5bn asset disposal plan

SoftBank founder Masayoshi Son speaks at the company's conference in Tokyo, Japan, on July 20, 2017. Reuters

SoftBank Group’s bankers have received orders for all ¥1.3 trillion (Dh45.1 billion/$12bn) of the domestic wireless unit’s stock they are selling and will probably place an over-allotment, according to sources.

SoftBank Corporation's order books for domestic and overseas investors were fully covered on Tuesday with Nomura Holdings and Daiwa Securities leading the distributions, sources said.

Local and international investors were drawn by the dividend yield at the latest price, which is lower than the initial public offering price of ¥1,500 in 2018, the sources said. Final pricing for the sale will be as early as September 14.

SoftBank Group shares have tumbled this week after the conglomerate made massive bets on technology stocks using derivatives, only to post a sharp decline in the sector in recent days. The Tokyo-based company’s stock dropped as much as 7.1 per cent on Wednesday, but recovered to close 2.9 per cent lower after Bloomberg’s report.

Founder Masayoshi Son said in August that SoftBank Group planned to sell about a third of its stake in the domestic wireless operation, adding to plans for asset sales of about ¥4.5tn. Mr Son has used the cash he’s raised to embark on a record ¥2.5tn in repurchases of the company’s own shares, lifting the parent company’s stock after investment missteps and setbacks from the coronavirus fallout.

The potential domestic over-allotment is slightly more than 100 million shares, which would bring in about ¥134bn at Wednesday’s price. Mizuho Financial Group, Bank of America  and JPMorgan Chase are also coordinators on the deal.

Mr Son’s many asset sales have put him in the unusual position of having excess cash. Separate from the SoftBank offering, the parent company has offloaded $13.7bn of Alibaba Group stock and a stake in T-Mobile US for about $20bn. Mr Son has also said that he is looking to sell or take public Arm, the chip design company that he bought four years ago for $32bn, and Bloomberg reported in August that Nvidia is in advanced talks to acquire the business.

With all the money coming in, Mr Son unveiled a new asset management arm that would invest in public securities. SoftBank Group later disclosed about $3.9bn of investments into 25 of the world’s largest technology companies including Amazon, Tesla, Netflix and Alphabet. It did not disclose details of its derivative stakes.

SoftBank said it was expanding its cash reserves beyond the asset sales already announced “to ensure flexible options to respond to changes in the market environment”.

The company cited “the ongoing uncertainty in the market environment due to concerns about a potential second or even third wave of Covid-19”.