SoftBank said to get 1.3 trillion yen in wireless stock orders

SOFTBANK Group Corp's bankers have received orders for all 1.3 trillion yen (S$16.8 billion) of the domestic wireless unit's stock they are selling and will probably place an over-allotment, according to sources.

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

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 yen in 2018, the sources said. Final pricing for the sale will be as early as Sept 14.

SoftBank Group shares have tumbled this week after the conglomerate made massive bets on technology stocks using derivatives, only to see 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 4.5 trillion yen.

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Mr Son has used the cash he's raised to embark on a record 2.5 trillion yen in repurchases of the company's own shares, lifting the parent company's stock after investment missteps and setbacks from the Covid-19 fallout.

The potential domestic over-allotment is slightly more than 100 million shares, which would bring in about 134 billion yen at Wednesday's price. Mizuho Financial Group, Bank of America Corp and JPMorgan Chase & Co 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 Corp offering, the parent company has offloaded US$13.7 billion of Alibaba Group Holding stock and a stake in T-Mobile US Inc for about US$20 billion.

Mr Son has also said that he is looking to sell or take public Arm Ltd, the chip design firm that he bought four years ago for US$32 billion, and Bloomberg reported in August that Nvidia Corp 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 US$3.9 billion of investments into 25 of the world's largest technology companies including Amazon.com, Tesla, Netflix and Alphabet. It did not disclose details of its derivative stakes.

SoftBank said it is 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." BLOOMBERG