Two of the world’s longest-awaited postal privatisations are set to go ahead in the next few weeks, potentially raising more than €14 billion for the cash-strapped governments of Italy and Japan.
A 40% stake in Poste Italiane is due to be floated next week with the aim of generating €4 billion, and Japan Post will follow on November 4, with pricing targeted at raising up to $11.65 billion (€10.35 billion).
Japan Post Holdings announced yesterday that it had set a price range of 1,100 – 1,400 yen per share ($9.15 – $11.65) for its flotation, while the parallel share placements for its two financial subsidiaries, Japan Post Bank and Japan Post Insurance, had been priced at 1,250 – 1,450 yen and 1,900 – 2,200 yen respectively. The official IPO price for shares in Japan Post Holdings will be fixed on October 26.
The Japanese government has been carefully considering how to price the postal shares to ensure strong demand from the public amid some reports of relatively low interest so far. About 80% of Japan Post shares will be reserved for sale within the country, and about 90% of them are planned to be sold to private individuals.
According to international media, officials and advisers have studied the Royal Mail IPO in October 2013, which was subsequently criticised for having under-valued the shares which soared by 38% on their first day of trading.
Tokyo is selling off shares in the three companies as a package. The shares sold will represent about 11% of their share capital respectively. The bulk of the IPO proceeds are destined to be used for rebuilding buildings and infrastructure destroyed by the devastating tsunami in 2011.
The Japanese government aims to gradually sell off more tranches in the three companies over the next few years, reducing state ownership of Japan Post Holdings to about one third, while the two financial companies could be fully privatised.
Meanwhile, the €4 billion privatisation of Poste Italiane is set to start next week with share sales and the company could be floated on the Milan stock exchange by the end of the month or early November.
Rome aims to sell off up to 40% stake in the state-owned postal group, which is valued at about €10 billion, to raise up to €4 billion to help reduce the country’s heavy public debts. Shares will be mostly targeted at institutional investors, with incentives for retail customers and company employees.
