Nomura, Morgan Stanley Said to Be Lead Banks for Suntory IPO

Nomura Holdings Inc. (8604), Morgan Stanley (MS) and JPMorgan Chase & Co. (JPM) were selected as the lead banks to manage Suntory Beverage & Food Ltd.’s initial public offering, said two people with knowledge of the matter.

Suntory Holdings Ltd. plans to list its unit’s shares on the Tokyo Stock Exchange as early as July and may release the details of the offering next week, said the people, who asked not to be identified before the announcement. Suntory expects to raise about 300 billion yen ($3 billion) to 500 billion yen by selling as much as 50 percent of the unit to domestic and global investors, the people said.

The IPO is set to be the biggest in Japan this year apart from real estate investment trusts. It comes after merger talks between Suntory and Kirin Holdings Co. failed in 2010 due to differing opinions on the merger ratio. Suntory has since been exploring ways to fund acquisitions that would help it expand outside of Japan, where the population is declining.

“Growth in the overseas market through M&A -- that will be an equity story that Suntory can draw to convince investors,” said Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co. “It will be the biggest IPO in a long time, and various investors will be interested.”

Photographer: Akio Kon/Bloomberg

Suntory Holdings Ltd. plans to list its unit’s shares on the Tokyo Stock Exchange as early as July and may release the details of the offering next week, said the people, who asked not to be identified before the announcement. Close

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Photographer: Akio Kon/Bloomberg

Suntory Holdings Ltd. plans to list its unit’s shares on the Tokyo Stock Exchange as early as July and may release the details of the offering next week, said the people, who asked not to be identified before the announcement.

Suntory may follow Kirin and Asahi Group Holdings Ltd. (2502), which have sought growth through overseas deals as the shrinking population damps domestic demand.

Overseas Acquisitions

Today’s news reports on the IPO “are not based on any announcements from Suntory Group,” the Osaka-based company said in a statement on its website. “Nothing has been decided at the moment” on the details of the offering, said Naoko Tsuda, a Tokyo-based spokeswoman.

Spokesmen for global coordinators Nomura, Morgan Stanley and JPMorgan declined to comment.

Suntory has focused overseas acquisitions on non-alcohol beverages over the past five years. The company bought France-based Orangina Schweppes Group in 2009 and paid 600 million euros in 2009 for New Zealand’s Frucor Beverages Group Ltd.

Profit at Suntory Holdings will increase 45 percent to 53 billion yen for the year ending Dec. 31, the company forecast in February. Revenue is projected to rise 9.1 percent to 2.02 trillion yen.

A financial-market rally is fueling appetite for share sales in Japan. The benchmark Topix Index (TPX) has climbed 39 percent this year on the back of Prime Minister Shinzo Abe’s policies to stimulate the world’s third-largest economy.

Nomura, Japan’s biggest brokerage, said in January that it expects IPOs will climb to a six-year high. About 60 Japanese companies will announce debut share sales in 2013, a 25 percent increase from last year and the most since 121 in 2007, according to the Tokyo-based bank.

To contact the reporters on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net; Yuki Yamaguchi in Tokyo at yyamaguchi10@bloomberg.net

To contact the editors responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net; Stephanie Wong at swong139@bloomberg.net

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