CKD's bank and insurer shareholders sell 3.57mn shares as the company lines up a ¥5bn buyback

CKD Corporation, the Tokyo- and Nagoya-listed automation-components maker, said on October 7 that seven shareholders will sell 3,570,800 of its shares in an underwritten secondary offering. On the same day its board authorised a buyback of up to 1.3mn shares or ¥5bn, to be run after the sale settles.

Who is selling

This is a sale of existing shares by current holders, not an issue of new stock. Sumitomo Mitsui Trust Bank is the largest seller with 1,000,000 shares. An insurer follows with 805,300, a Sumitomo Mitsui bank with 745,700 and a Mitsubishi UFJ bank with 417,000. Three regional lenders sell 333,300, 154,000 and 115,500 shares.

CKD ties the sale to a wider shift. In its notice it says Japanese shareholders are reviewing policy-held shares as governance tightens. It says it held talks mainly with the financial institutions that own its stock, and they agreed to sell. The company says it wants to broaden and diversify its shareholder base.

The offering is a bought deal: Daiwa Securities and SMBC Nikko Securities are joint lead managers, and the underwriters take all the shares. Some may be sold to investors in Europe and Asia, excluding the US and Canada. An extraordinary report filed the same day with the Kanto Local Finance Bureau caps that overseas portion at half of the combined offering and over-allotment total.

Daiwa may also sell up to 535,500 borrowed shares as an over-allotment, with a greenshoe option running to November 20, 2026. The price is not yet set. It will be the Tokyo closing price on the pricing date, a day between October 19 and 22, multiplied by 0.90 to 1.00 for a provisional range, and then adjusted for demand. The Sumitomo Mitsui bank among the sellers has agreed to a lock-up that starts on the pricing date and ends on the 180th day counted from delivery. CKD has agreed to its own restriction on issuing shares during that same period, with exceptions such as stock splits and capped share-based pay.

The buyback

The buyback is capped at 1.3mn shares, equal to 1.94% of shares outstanding excluding treasury stock, and at ¥5bn. CKD gives two reasons: capital efficiency and shareholder returns, and easing the effect of the sale on supply and demand for its shares. Purchases will be made on the Tokyo Stock Exchange. The notice warns that some or all of the shares may not be bought, depending on market conditions.

The window opens six business days after pricing, the business day after the offering's delivery date, and closes on December 30.

The offering notice gives no sale price or total proceeds yet.