(Bloomberg) -- Line Corp. hiked the price of its initial public offering to raise as much as 116 billion yen ($1.1 billion), citing strong demand and market conditions.
The operator of Japan's most popular messaging service increased the price range for shares to 2,900 yen to 3,300 yen from an earlier target of 2,700 yen to 3,200 yen. Line is offering 35 million shares in its debut. Including a so-called greenshoe option that allows it to increase the number of shares sold, the company may wind up raising as much as 132.8 billion yen.
Line is planning to go public during one of the most tumultuous times for global markets in years, after the U.K. voted to leave the European Union. Its well-recognized brand in Japan, where monthly active users represent almost half the population, is expected to attract individual investors. Line, backed by South Korean search portal Naver Corp., is aiming to list this month in New York and Tokyo in what could be the largest technology IPO of 2016.
“The stock will do well on the back of retail investor demand,” said Amir Anvarzadeh, manager of Japanese equity sales at BGC Partners Inc. “I can see the price going to 4,000 yen post listing, but the chances of significant growth overseas are very remote.”
The Japanese stock market has pared the losses in the wake of the U.K.'s vote. The Nikkei 225 Stock Average climbed 4.9 percent last week, after closing 7.9 percent lower on June 24. Line will set the final price on July 11.
Line originally filed to go public two years ago, but held off in hopes of getting a stronger reception from investors. Instead, the delay may have cost the messaging service $3 billion in valuation as Facebook Inc. began encroaching on its turf and the market for technology company IPOs cooled. Line will be valued at about 693 billion yen if it prices its IPO at the very top of its range, compared with a target of about 1 trillion yen in 2014.
Line is now gearing up for a battle with far larger rivals Facebook and Tencent Holdings Ltd. as it looks to expand its 218 million user base beyond its strongest markets of Japan, Taiwan and Thailand. It plans to use the proceeds to spearhead an expansion across Asia and, eventually, the U.S.
To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net, Takashi Amano in Tokyo at tamano6@bloomberg.net. To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Edwin Chan
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