Japan Display sets terms of IPO

Posted Mar 11, 2014

Japan Display is the largest maker of screens for tablets and smartphones. The company has filed to go public, but has set the price of it’s listing at the bottom of its guidance range. This is because foreign investors did not sound as receptive as expected.

Partially owned by the Japanese government, Japan Display is going public at a good time since the stock market in Asia is performing well. Japan Display is going to offer shares at 900 yen per share, which would give them a total value of 318.5 billion yen ($3.08 billion). Japan Display cut the offering for overseas investors to 37.5% from 45%.

Bankers have concerns that Japan Display is overly dependent on Apple for its business. Japan Display makes 30% of its revenue from working on Apple iPhones and iPads. There is also a decline in screen prices.

Japan Display launched in 2012 through a merger between the struggling display units at Sony Corporation, Toshiba Corporation, and Hitachi. Last week Japan Display set a range of 900 to 1,100 yen for the offering. The IPO is expected to happen on March 19th on the Tokyo Stock Exchange.

Japan Display is offering 60% of its expanded share capital in the listing, which will also raise 126 billion yen from the sale of new shares. This would go towards funding display manufacturing facilities. The offering would enabled state-backed Innovation Network Corp of Japan to sell its stake to slightly over one-third from 86.7% to double its money from an initial 200 billion yen investment. Japan Display may issue an additional 16.2 billion yen in shares, which would bring the total offering to around 335 billion yen.

[Source: Reuters]