Rakuten Bank Shares Fall as Parent Company Plans to Reduce Stake

Rakuten Bank’s shares experienced a significant decline on Thursday morning after its parent company, Rakuten Group, announced its intention to reduce its stake in the bank. The shares were down 8.4%, trading at 2,508 yen. This marks the largest one-day decline since September 27, according to FactSet.

Rakuten Group revealed its plans for an overseas secondary offering at the Tokyo stock market’s open on Thursday. The offering will involve 24.55 million shares of Rakuten Bank, priced at 2,470 yen per share. This represents a 9.8% discount to the closing price of 2,738 yen on Wednesday. The total value of the offering is estimated to be around 60.64 billion yen ($411.68 million).

As a result of this offering, Rakuten Group’s stake in Rakuten Bank will decrease from 63.34% to 49.27%. The decision to sell assets comes as Rakuten Group faces the challenge of managing its debt obligations. With nearly 1 trillion yen of debt due for repayment or refinancing within the next two years, the Japanese technology conglomerate is taking steps to address the issue.

According to a report by Citi Research analyst Mitsunobu Tsuruo, Rakuten Group’s move to sell Rakuten Bank shares could provide some support. However, it is expected that there will still be lingering concerns that need to be addressed.