In today’s briefing:
- Rakuten (4755 JP) – A Big Deal With Very Interesting Characteristics – Index Matters
- Rakuten US$2.4bn Placement – Larger than Rumored, Some Indications of Finality
- Rakuten (4755 JP) Offering: Could Drop Some More Before Passive Buying Kicks In
- Rakuten: ¥333bn Offering Confirmed, Cheap Valuation and Mobile Turnaround on the Horizon
- GLP J-Reit (3281 JP): Cheaper than Peers, Offering Could Be a Catalyst
- Aeon to Launch Ground-Breaking Online Food Business
Rakuten (4755 JP) – A Big Deal With Very Interesting Characteristics – Index Matters
- Yesterday (15 May 2023) just before EOD, an article ran suggesting a ¥300bn capital raise by Rakuten (4755 JP). The stock fell 10% in 10mins. Rakuten hemmed/hawed but didn’t deny.
- One day later, we have a deal. It is up to 546mm shares including greenshoe, which at the close was ¥333bn. 468mm shares to the public, 79mm to 3rd parties.
- This increases Real World Float by 95%. In that respect this is vaguely IPO-ish. Investors have to re-underwrite. Then Passive re-shrinks the float. Details matter.
Rakuten US$2.4bn Placement – Larger than Rumored, Some Indications of Finality
- Rakuten (4755 JP) aims to raise up to US$2.4bn (JPY323bn) via a global offering.
- The deal was undoubtedly accelerated by Reuters breaking the news of a possible equity raising on 15th May 2023.
- We have covered most aspects of the deal in our previous note, in this note we talk about the deal dynamics and run the deal through our ECM framework.
Rakuten (4755 JP) Offering: Could Drop Some More Before Passive Buying Kicks In
- Rakuten (4755 JP) is looking to raise around US$2.4bn by selling shares via a Japanese Public Offering and an International Offering as well as through a third-party allotment.
- The stock has already dropped 13.7% in the last couple of days on large volumes as the rumours of the offering started to swirl.
- The offering prices late next week and passive trackers will be buying stock once the stock settles and this will provide support in the near-term.
Rakuten: ¥333bn Offering Confirmed, Cheap Valuation and Mobile Turnaround on the Horizon
- Rakuten (4755 JP) announced a public offering of 468.1m new shares and third-party allotment of 78.8m shares to secure ¥333bn.
- Enhanced network coverage via KDDI network sharing to attract new users and overcome previous barriers for Rakuten Mobile.
- Mobile breakeven could drive Rakuten’s operating profit to ¥150-200bn, potentially boosting the share price to around ¥2,000.
GLP J-Reit (3281 JP): Cheaper than Peers, Offering Could Be a Catalyst
- On 15th May 2023, large-cap logistics JREIT GLP J-REIT (3281 JP) (“GLP”) announced a follow-on equity offering to fund part of their recently-announced property acquisition.
- The primary offer quantity is 209,991 units. In addition, there will also be an over-allotment quantity of 3,200 units. The total size of this offering could be roughly ¥30.6bn (~US$225mn).
- In this insight, we take a closer look at the details of this offering and the potential of this offering to trigger strong secondary market performance in the following weeks.
Aeon to Launch Ground-Breaking Online Food Business
- It has taken three years to build and set up but Aeon will finally open its first automated warehouse for online food sales in Chiba this summer.
- The warehouse will run on technology from Ocado and act as the backend for a completely new online supermarket called Green Beans.
- A second warehouse is due to come online in 2026, expanding sales to all of Tokyo and into Kanagawa. This is the most advanced food e-commerce operation in Japan.
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