Rakuten to Raise $1.5 Billion in Japan, Overseas Share Sale

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Hiroshi Mikitani
Rakuten Inc. CEO Hiroshi Mikitani. Photographer: Kiyoshi Ota/Bloomberg

Rakuten Inc. plans to raise as much as 188 billion yen ($1.5 billion) in a public share sale, mainly to pay down debt as the online mall operator pursues acquisitions to boost its Internet services business.

The share sale, to be conducted in Japan and overseas, will be priced as early as June 23, Rakuten said in a statement to the Tokyo Stock Exchange on Thursday.

Rakuten shares fell 6.6 percent to 1943.5 yen as of 1:27 p.m. local time, the lowest intraday price in three months. The benchmark Topix gained 0.3 percent.

The company will spend 80 billion yen of the proceeds to redeem commercial paper, and about 90 billion yen to repay bank loans. It also committed about 34 billion yen to develop or acquire software such as for its Rakuten Ichiba online marketplace, according to the statement.

Rakuten, led by billionaire Chairman Hiroshi Mikitani, in September agreed to buy U.S. rebates website Ebates Inc. for $1 billion in a deal to more than double its transactions from outside its home market. It has announced a further eight deals so far this year worth over $1 billion, including an investment in U.S. ride-sharing platform Lyft Inc.

The recent slide in the yen may force some Japanese companies to scale back overseas acquisitions as deals become more expensive, Bloomberg Intelligence analyst Thomas Jastrzab wrote in a note on Thursday, hindering their efforts to offset a shrinking domestic market with international expansion.

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