Sony to float financial arm in Japan’s biggest IPO

May 29th, 2007

Sony Corp plans to raise about $2.5bn by listing its financial unit, in what is expected to be Japan’s largest IPO this year, reports [1] the Nikkei business daily [via Reuters].

Sony will sell at least 30 per cent of its stake in Sony Financial Holdings this autumn and use the roughly Y300bn in proceeds to bolster core electronics products including portable music players and flat TVs, the Nikkei said.

Sony, which last year said it intended to float its financial arm this year, issued a statement on Thursday saying there was no change to its previously announced plan. Shares in Sony closed the morning session in Tokyo up 0.9 per cent at Y6,460, roughly in line with the broader market.

Shigemi Nonaka, special adviser at Polestar Investment Management, said the IPO would have some positive impact for Sony, allowing it to procure capital. “But I don’t know if this is a long-term plus for the company. The key is whether or not they can expand their core business,” he said.

The unit, a Sony holding company that oversees the conglomerate’s online banking and lucrative life insurance operations, will have a market value of at least Y1,000bn ($8.43bn), the Nikkei said, putting it in the top 10 among Japanese banks.

The IPO would be Japan’s biggest since last year’s $3.2bn flotation of Aozora Bank, which was itself the largest in eight years, and likely rank as the top initial share offering in 2007.

Sony has already made a tentative application to the Tokyo Stock Exchange, the Nikkei said.

[1] http://www.reuters.com/article/ousiv/idUST14969020070426

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