Qatar’s sovereign wealth fund and KKR will buy into SBI Shinsei Bank when it relists in Tokyo this month, adding a much-watched global institutional investor as well as helping to build closer ties with a major private equity company.
SBI Shinsei released a prospectus Monday setting out tentative terms for the Dec. 17 offering on the Tokyo Stock Exchange’s Prime market, bringing information about interested investors to light.
The Qatar Investment Authority is expected to spend $200 million for a stake of around 2% to 3%, while KKR will invest up to 3 billion yen ($19 million), which is expected to put its interest at 0.23%.
This listing will be the third for SBI Shinsei, whose predecessor, Long-Term Credit Bank of Japan, was nationalized after it failed in the late 1990s. New investors are set to include U.K.-based M&G Investments, which is investing $175 million, and BlackRock, which has pledged to buy 13.24 million shares, equivalent to roughly 19 billion yen.
QIA expected to spend $200m for a 2-3% stake, while KKR will invest up to $19m, which is expected to put its interest at 0.23%.
The prospectus lists an offering price range of 1,440 to 1,450 yen per share. The price will be set Dec. 8 after book-building this week. A price of 1,445 yen, in the middle of the range, would give SBI Shinsei a market capitalisation of 1.29 trillion yen, or $8.3 billion, making this one of Japan’s largest initial public offerings of the year.
SBI Shinsei and principal underwriters for the offering have been meeting with institutional investors since the TSE approved the listing application in mid-November. With tentative terms now set, the bank will gauge investor interest before setting its price.
The interest shown by QIA, as a leading long-term investor, is expected to attract other big institutional players. SBI Shinsei likely also hopes that its participation will help keep the price stable after listing.
The offering will involve issuing more shares as well as selling a portion of the stake held by parent SBI Holdings, mainly to investors in the U.S. and Europe. Japanese agricultural lender Norinchukin Bank, which had signed a business alliance agreement with SBI Shinsei this November in asset management and digital technology in farming, is set to buy up to 5 billion yen in shares.
QIA — which manages Qatar’s surplus assets to ensure financial stability and build assets for future generations — has been ramping up investment in Japan more broadly, as normalising interest rates make the country a more appealing target for strategic investment. In November, it and Japanese financial services group Orix announced a private equity fund that could invest around 1 trillion yen.
SBI has been strengthening relationships with Middle Eastern investors. An investment subsidiary in 2024 listed an exchange-traded fund for Saudi Arabian stocks in Tokyo, giving Japanese retail investors direct access to Saudi equities. SBI also manages funds together with such partners as the Saudi Ministry of Investment.
KKR reached a basic agreement with SBI Shinsei to cooperate on investment and financing, as well as on SBI Holdings’ efforts to become Japan’s “fourth megabank” through coordination with regional banks.
KKR looks to leverage its private equity investments to enhance the asset management of SBI Shinsei itself as well as regional banks in which SBI Holdings owns stakes.
Reuters
