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Japan and Tokyo Governments Eye $4.7 Billion Valuation for Tokyo Metro in Upcoming IPO

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Japan’s national and Tokyo governments are targeting a 700 billion yen ($4.7 billion) valuation for Tokyo Metro as they gear up for what could be the nation’s largest initial public offering (IPO) in nearly six years. The listing, expected to take place as early as late October, will see the sale of half of the company, potentially raising 350 billion yen. This IPO is poised to surpass the size of Kokusai Electric’s IPO last year and become the biggest since SoftBank Group listed its wireless unit in 2018.

Currently, the two governments own 100% of Tokyo Metro, with the central government holding a 53.4% stake and the Tokyo government owning the remaining 46.6%. The funds from the IPO will be used by the central government to repay reconstruction bonds issued after the devastating 2011 earthquake and tsunami. As they move forward with the listing, the governments plan to brief brokerages within the week and anticipate approval from the Tokyo Stock Exchange by mid-September.

Tokyo Metro, with a rich history dating back to 1920, operates 195 kilometers (120 miles) of subway lines that serve 6.5 million passengers daily. The company has diversified its business to include real estate and retail, and it reported a significant rise in net profit to 46 billion yen for the financial year ending in March 2024, as Japan’s economy rebounded from the COVID-19 pandemic.

Nomura, Mizuho, and Goldman Sachs have been appointed as the joint global coordinators for the listing, which is set to mark a significant moment in Japan’s financial and infrastructure sectors.

Sony Rules Out Renewing Offer for Paramount, Citing Strategic Misalignment

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Sony has officially withdrawn from the bidding war for Paramount Global, stating that acquiring the company would not align with its strategic goals. Hiroki Totoki, Sony‘s Chief Financial Officer, confirmed the decision during the company’s first-quarter earnings presentation, stating that a full acquisition of Paramount would pose significant risks due to potential misalignment with Sony‘s capital allocation structure.

This decision comes after reports from the Japanese financial newspaper Nikkei, indicating Sony‘s withdrawal following Skydance Media‘s successful acquisition of Paramount Global. Skydance, along with partners RedBird Capital Partners and KKR, invested over 2.4 billion.

Sony and private equity firm Apollo Global Management had previously expressed interest in acquiring Paramount for approximately $26 billion. However, Sony‘s revised stance reflects a shift in strategy, potentially influenced by the company’s 7% profit decline in fiscal 2023, attributed to weakness in its financial services division.

The deal marks the end of the Redstone family’s long-standing control over Paramount. Sumner Redstone, the media mogul, acquired Paramount in 1994, and his daughter Shari Redstone has led the company since his passing in 2020.