Line Said to Submit Listing Application to Tokyo Stock Exchange

Jul 15, 2014 9:16 am ET

July 15 (Bloomberg) -- Line Corp., operator of Japan’s most popular mobile messaging service, submitted an application for an initial public offering to the Tokyo Stock Exchange, people familiar with the matter said.

Line, controlled by South Korea’s Naver Corp., plans to appoint Nomura Holdings Inc. as a lead underwriter for the share sale, according to the people. The offering could value Tokyo- based Line at more than 1 trillion yen ($9.8 billion), the people said, asking not to be identified as the deliberations are private.

The company’s planned U.S. listing may come after its Tokyo trading debut, another person familiar with the matter said. Line is working with Nomura and Morgan Stanley to prepare for an IPO as soon as November, and is considering a listing on the Tokyo bourse and either the New York Stock Exchange or Nasdaq, people familiar with the situation said last month.

Line is pursuing a share sale after Japanese e-commerce operator Rakuten Inc. acquired Viber Media Ltd. and Facebook Inc. agreed to buy rival messaging service WhatsApp Inc. for as much as $19 billion. Japanese initial public offerings have raised $6.7 billion this year, down from $7.9 billion the same period in 2013, data compiled by Bloomberg show.

Fumiko Hayashi, a Tokyo-based spokeswoman for Line, declined to comment. Kenji Yamashita, a spokesman for Nomura, and Mika Watanabe, a spokesman for Morgan Stanley, also declined to comment.

Video Calling

Line’s messaging app surpassed 480 million users this month, Chief Operating Officer Takeshi Idezawa said in Tokyo on July 11. About 85 percent of subscribers are located outside Japan, the company said in February.

Revenue for Line’s core business more than tripled in the first quarter to 14.6 billion yen, it said in a May 8 statement. The company has added features such as games, comics, free voice and video calling, photo and video sharing, and tie-in apps including a camera.

Gumi Inc., the Tokyo-based developer of mobile games including “Brave Frontier,” plans an IPO as soon as December that may value the company at about 100 billion yen, people with knowledge of the matter said earlier this month. Recruit Holdings Co., a Japanese provider of staffing services, is preparing an IPO that may take place as soon as in October, people familiar with knowledge of the matter said in May.

Line, which has 666 employees, started providing its messaging application after the March 2011 earthquake in northeastern Japan knocked out telephone services, according to its website.