Japan Display Slumps in Trading Debut After $3.1 Billion IPO (1)
Bloomberg News
Japan Display Inc. plunged in its debut after the supplier of screens for Apple Inc. devices priced shares through an initial public offering at the bottom of a planned range.
The IPO raised 318.5 billion yen ($3.1 billion) with an offer price of 900 yen. The stock declined as much as 22 percent and traded at 749 yen as of 10:04 a.m. in Tokyo. The company plans to use the IPO proceeds to expand production in Japan to meet display demand from manufacturers of mid-priced smartphones.
Global smartphone shipments will slow to 8.3 percent annual growth in 2017 as mature markets become saturated, Framingham, Massachusetts-based IDC Corp. said in a Feb. 26 report. Japan Display was created when Sony Corp. (6758), Toshiba Corp. and Hitachi Ltd. spun off their panel businesses to state-backed Innovation Network Corp. of Japan, after struggling to compete in the television display market.
'Recently there has been some pricing pressure in panels, so fundamentally that is a weak trend in the near-term,' said David Rubenstein, a managing director at Advanced Research Japan in Tokyo. 'Also the Japanese stock market in general has been underperforming this year.'
Hitachi Maxell Ltd., an electronics manufacturer, fell 14 percent below its IPO price on March 18, its first day of trading in Tokyo. Japan's benchmark Topix index was unchanged today and has lost 10 percent this year.
Nomura Holdings Inc., and Goldman Sachs Group Inc. acted as joint global coordinators for the offering, according to terms for the deal obtained by Bloomberg News March 3. Corp., Deutsche Bank AG and UBS AG (UBSN) are also among banks helping manage the sale.
Japan Display had planned to sell shares in the range of 900 to 1,100 yen, according to terms for the deal. The company sold 140 million new shares and investors including Sony offered 213.9 million existing shares, according to a filing.
INCJ will retain 214 million shares, which is about 35 percent of Japan Display's issued capital, it said.
To contact the reporter on this story: Takashi Amano in Tokyo at tamano6@bloomberg.net
To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Aaron Clark, Terje Langeland
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