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(2nd LD) Messaging app LINE to list shares in Tokyo, New York

All News 17:33 June 10, 2016

(ATTN: UPDATES with more details in 3-4 pars; FIXES number of LINE users in 9th para; ADDS Naver's share price, outlook in last 3 paras)

SEOUL, June 10 (Yonhap) -- Global messaging app operator LINE Corp. said Friday it will list its shares in Tokyo and New York next month, in what could be one of the year's biggest initial public offerings (IPO) for a technology company.

In a regulatory filing with the Tokyo Stock Exchange, LINE said the company plans to debut its shares on the New York stock market on July 14 and the Tokyo bourse on July 15.

The Japanese arm of South Korea's internet giant Naver Corp. predicted the IPO price to reach 2,800 yen (US$26.20). LINE said it will finalize the IPO price on July 11 and receive subscriptions for 35 million shares sold to the public for the next two days.

Shortly after the South Korean stock market closed, Naver unveiled the listing plan for its Japanese subsidiary in a separate filing with the Korea Exchange.

The IPO comes two years after LINE, which entered the mobile messenger business five years ago, started to push for share listing.

"LINE is an overseas subsidiary that has grown on its own," a company official said. "It is the first time for a South Korean company to list shares of an overseas unit in two foreign markets simultaneously."

LINE is expected to raise more than 3 trillion won ($2.8 billion) with a dual listing in the U.S. and Japan, with the market value likely to reach some 600 billion yen ($5.6 billion), the largest among Japanese firms listed this year. But the market cap hovers below the 1 trillion yen forecast by market analysts.

LINE said the proceeds from the IPO will be used to promote its further growth in Japan and the global market, such as mergers and acquisitions.

The company has seen the growth of its messaging app users slow down since the second quarter of last year. Naver, South Korea's largest internet portal, owns 100 percent of LINE, which is based in Japan, and operates a mobile messenger of the same name that is extremely popular in Japan, Thailand, Taiwan and Indonesia. The number of LINE's monthly active users came to 220 million as of March this year.

LINE has been engulfed in speculation over its listing in the United States since July 2014. The company has insisted that it is considering such an option, but nothing specific has been decided.

Naver has been faced with bad optics on the issue with some suspecting the primary purpose of the IPO is to enable top managers and its employees to exercise their stock options for profit.

Of LINE's 175 million outstanding shares, 14.6 percent have been granted to its senior managers and staff members in stock options since 2012, which could be exercised only when the company is listed. Stock options give holders the right to sell shares at an agreed-upon price within a certain period or on a specific date.

Naver's shares closed at 720,000 won on the Seoul bourse on Friday, unchanged from the previous session.

Market watchers said LINE's IPO will likely have a positive impact on Naver's share price down the road since it has removed uncertainty over its listing despite a lower-than-expected market capitalization.

"LINE's listing will come as an opportunity to eliminate uncertainty over Naver's share price," said Kim Chang-kwon, a researcher at Mirae Asset Daewoo Securities Co. "Naver's value should be reassessed by adding that of LINE."
(END)

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