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Nippon Columbia Nearly Triples New Share Issue; Stock Surges

Bloomberg, 07.04.02

Nippon Columbia Co., a music and video unit of U.S. investment firm Ripplewood Holdings LLC, said it will issue almost triple the number of new shares it announced two days ago to meet demand from investors.

The Tokyo-based company did not say how it will use the 6.67 billion yen ($55.5 million) it expects to raise from the issue.

Nippon Columbia shares surged as much as 30 percent after the announcement, reaching 198 yen. They last traded at 178 yen, up 26 yen. A total of 7.9 million shares changed hands, almost 12 times the daily average for the past three months.

Nippon Columbia will issue 49.6 million new shares, up from the 17.6 million shares announced Tuesday. The share issue accounts for about 21 percent of Nippon Columbia's shares outstanding. Company spokesman Chikamitsu Kawakami said the share issue was increased due to demand.

Lehman Brothers Japan Inc. will buy all the 7.4 million shares to be issued in Japan, which will be sold to institutional investors, with the balance to be sold overseas. “We received more subscriptions than expected,” said Miyuki Sato, a spokeswoman at Lehman. She declined to say who is buying the shares and how many applications they received. It is unusual for a company to boost or cut a new share issue by a wide margin in such a short period, an investor said.

“I have rarely seen such a case like this,” said Makoto Sakuma, who manages 100 billion yen in assets for Asahi Life Investment Co.