Pachinko Operator Niraku Said to Plan $100 Million Hong Kong IPOFox Hu and Shigeru Sato
Niraku Corp., a Japanese operator of pachinko parlors, is preparing what would be Hong Kong’s first initial public offering by a foreign company since December last year, people with knowledge of the matter said.
The company, based in northeastern Japan’s Koriyama city, plans to seek about $100 million from the share sale in the first half of 2015, said the people, who asked not to be identified as the information is private. Niraku has yet to appoint investment banks or apply to the Hong Kong stock exchange for permission to list, they said.
Niraku seeks to repeat the success of Dynam Japan Holdings Co. in selling shares in Hong Kong, where some of the world’s biggest casino operators are traded. Dynam, a Tokyo-based pachinko operator, has surged 47 percent in Hong Kong trading since an August 2012 IPO that raised $202 million, data compiled by Bloomberg show.
No foreign companies have conducted first-time share sales in Hong Kong this year, according to the data. The last to list in the city were Singapore’s Kingbo Strike Ltd. and Japan’s Econtext Asia Ltd., which completed IPOs in December that raised a combined $77 million, the data show.
Pachinko games are a hybrid of pinball and slot machines, which have skirted a nationwide gambling ban to become an industry that takes in bets of 19 trillion yen ($175 billion), according to the Japan Productivity Center.
Niraku, founded in 1950, operates 54 pachinko parlors in Tokyo and surrounding areas, as well as the northeastern prefectures of Fukushima and Miyagi, according to its website. A spokesman for Niraku declined to comment.
The company’s sales for the year ended March fell 2.2 percent to 235.4 billion yen, after rising 15 percent over the previous two years. Its home prefecture of Fukushima was hit by an earthquake and tsunami in March 2011.