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.
