Dentsu pushing ahead with IPO on November 30

TOKYO: Dentsu, Japan's largest agency, is proceeding with plans to list its shares on the Tokyo Stock Exchange on November 30 despite the country's deteriorating economy, plunging profits of major clients and declining billings. The desire of Dentsu's two main shareholders, Kyodo News and Jiji Press to unload part of their holdings is believed to be the main reason why the offer is going ahead. The agency will offer 25,000 new shares, while existing shareholders will sell 110,000 at between Y380,000 and Y400,000. About 20 per cent of shares on offer will be reserved for international investors. After the IPO, almost 10 per cent of the agency will have been sold to the public. The offer is expected to raise up to Y10 billion (US$82.5 million) against Y200 billion originally envisaged. Brokers said the shares were priced cheaply enough to make them attractive to individual Japanese buyers. Investors are expecting Dentsu to unveil a growth strategy. Since large domestic market share gains are thought unlikely, growth will need to come internationally. However, analysts are unconvinced that Dentsu's 20 per cent stake in Bcom3 will make it a driving force in that relationship, which has so far failed to deliver significant gains in either the US or Europe, key regions where Dentsu is weak.

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