J Trust Drops to 6-Month Low After Shares Dip Below Offer Price

J Trust Co. (8508), the Japanese financial services firm that completed a record stock rights offer last month, plunged 11 percent to the lowest in six months after its shares fell below the offer’s strike price.

The shares closed at 1,627 yen today, the lowest since Feb. 27, on the Tokyo Stock Exchange after slipping as much as 22 percent. That’s the biggest intraday drop since July 22, 2010. The benchmark Topix Index (TPX) gained 2 percent.

J Trust, on May 14 said it planned to issue 63.1 million shares at 1,800 yen apiece, giving shareholders one new share for each share owned. Last month, it raised 97.7 billion yen ($988 million) selling the securities to finance takeover bids in Japan’s biggest-ever rights offer.

“The shares’ dip below the strike price of 1,800 yen for the rights offering likely prompted investors to cut losses and fueled the selloff,” said Masamitsu Ohki, a fund manager at Stats Investment Management Co.

Tokyo-based J Trust acquired bankrupt consumer lender Takefuji Corp. last year, beating Seoul-based A&P Financial Co. The Korean consumer finance company is seeking 2.13 billion yen in damages from J Trust related to its takeover of Takefuji, according to Japan Finance Ministry filing.

To contact the reporter on this story: Takako Taniguchi in Tokyo at ttaniguchi4@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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