Recruit Declines After Major Investors Plan to Unload Holdingsby
Company to offer 61.1 million shares in Japan and overseas
Dentsu, NTT Data, are among investors planning to unload stock
Recruit Holdings Co., Japan’s biggest employment services firm, fell in Tokyo trading after a group of shareholders said they’ll sell their holdings, adding to the number of Japanese companies disposing of stakes in unrelated companies.
The stock fell as much as 7.4 percent to 3,830 yen on Thursday, touching its lowest intraday level since Aug. 9. After the close of trading on Wednesday, Recruit Holdings said in a statement that advertiser Dentsu Inc. and telecommunications company NTT Data Corp. are among owners that will sell 61.1 million shares -- valued at 253 billion yen ($2.5 billion) based on yesterday’s close.
A year after Japan introduced a governance code requiring listed companies to disclose the economic rationale for owning stakes in other firms, more Japanese are starting to unload stakes in companies in unrelated businesses. For example, the country’s biggest banks sold $2.6 billion of shares in their client companies during the year ended March.
Japanese companies commonly own stakes in each other through cross shareholdings, a practice that Prime Minister Shinzo Abe has been seeking to discourage as part of his push to improve corporate governance across Japan Inc.
Some of the companies selling are ones that Recruit has stakes in. Recruit also agreed to buy back as many as 8.5 million of its own shares.