Japan Display, a major supplier to Apple, raised a lower-than-targeted $3.1 billion from its initial public offering of shares on Monday as weak markets helped dampen down demand.
The world’s largest manufacturer of screens for tablets and smart phones sold 140 million primary shares and 213.9 million secondary shares – with an overallotment of 18 million shares – at ¥900 ($8.72) each, at the bottom end of its initial ¥900 to ¥1,100 ($8.72 to $10.66) range.
Some 132.7 million shares, or 37.5% of the total shares on offer, were made available to international investors, while 221.2 million went to the domestic market, according to a term sheet seen by FinanceAsia. Initially it planned to offer 45% to global investors.
The Tokyo-based company plans to use the proceeds – it had hoped to raise $4 billion – to increase capacity across a number of its production lines and to fund new developments in liquid crystal display technology.
Bankers had expected Japan Display – a 2011 joint venture between Sony, Toshiba and Hitachi’s technology units – to resonate well with investors. Roughly one-third of its revenues are sourced from Apple and the company has differentiated itself by specialising in small-to-medium-sized LCD units.
But worries over China’s bad debt issues and the ongoing crisis in Ukraine have made investors wary, and rocky markets Monday helped undermine confidence, with the Nikkei dropping 1% and the Hang Seng closing down 1.75%.
Consumer demand for smart phones and tablets is strong globally and is seen staying that way. Consultancy NPD DisplaySearch expects global tablet computer shipments to total 315 million in 2014, rising to 455 million by 2017, representing nearly 75% of the mobile PC market.
Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs, Morgan Stanley, Nomura, and UBS are joint bookrunners for the international tranche, while Goldman Sachs Japan, Mitsubishi UFJ Morgan Stanley Securities and Nomura Securities and are handling the Japanese tranche.
