Japan Tobacco Drops on Report Share Sale Due Soon: Tokyo Mover

Japan Tobacco Inc. dropped in Tokyo trading after Reuters reported the government will begin selling shares it owns in the company within days.

Asia’s largest cigarette maker by market value fell 1 percent to 2,895 yen at the close in Tokyo, after dropping as much as 5.9 percent. Bankers met yesterday on details of the share sale, Reuters reported, citing sources close to the deal.

The former tobacco monopoly has gained 19 percent this year in Tokyo trading, surpassing an 10 percent gain in the benchmark Nikkei 225 Stock Average. A law passed in 2011 allows the Ministry of Finance, which owns about 50 percent of Japan Tobacco, to sell one-third of its entire holding to help pay for earthquake rebuilding.

The maker of Mild Seven cigarettes has said it plans to buy back 250 billion yen of the shares to be sold while the rest will be marketed to investors.

The Finance Ministry hasn’t made a decision on the share sale as yet, according to a government official who asked not to be named. Japan Tobacco spokesman Hideyuki Yamamoto declined to comment on the timing of the share sale.

Daiwa Securities Group Inc. and Goldman Sachs Group Inc. were selected by the Japanese government to lead the global sale, the ministry said in June. Mizuho Securities Co. will help manage the offering in Japan and JPMorgan Chase & Co. will assist with the sale abroad, it said.

The ministry decided not to sell the stake last year due to weak economic conditions and political uncertainty, a ministry official said in November.

To contact the reporter on this story: Yuki Yamaguchi in Tokyo at yyamaguchi10@bloomberg.net

To contact the editor responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net

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