Nomura Holdings is in discussions to sell its stake of about one-third in the brokerage’s real estate unit to Japan Post Holdings Co, according to people familiar with the talks.
The talks are at an early stage, said the people, who asked not to be identified because the discussions were private. The Tokyo-based postal giant is considering a tender offer bid to gain a majority stake in Nomura Real Estate Holdings in an effort to boost profits by strengthening its property business, NHK reported on Friday.
Nomura Real Estate has a market value of ¥389bn ($3.4bn) and Nomura Holdings was its biggest shareholder with about a 35% stake, according to Bloomberg-compiled data. Japan Post said last month it will book a ¥400.3bn charge on a write-down of its investment in Australia’s Toll Holdings, turning a projected profit for the full year ended March into a loss.
Calls to Nomura Real Estate after normal working hours in Tokyo weren’t immediately answered. Nomura Holdings’ Tokyo-based spokesman Kenji Yamashita declined to comment.
Masatsugu Nagato, president of Japan Post Holdings, said in a statement after the report that the company is considering various possibilities for new capital alliances. In an interview he said that the company will continue to consider acquisitions if it can find a good target.
Japan Post made a written acquisition proposal to Nomura Real Estate in late last year, and has also had talks on the matter with Nomura Holdings, NHK reported. Nomura Real Estate had net income of ¥47bn in the 12 months ended March 31, down slightly from ¥47.2bn a year earlier. The company is involved in the development and sale of condominiums, primarily in the Tokyo area, as well as in leasing office buildings, and brokerage and management businesses.
The developer had ¥1.59tn in assets at the end of March including real estate for sale or real estate to be sold of about ¥370bn.
The government sold shares in Japan Post Holdings in 2015, mainly to retail investors, as part of a $12bn IPO that included its banking and insurance subsidiaries. Its shares, which listed at ¥1,400, have been trading below that level since March.
Pedestrians walk past the headquarters of Nomura Holdings. Nomura is in discussions to sell its stake of about one-third in the brokerage’s real estate unit to Japan Post Holdings.
