Lintec Corporation used a same-day treasury buyback to soak up more than 5.3 million shares that Nippon Paper Industries had been due to sell into the open market, cutting the size of a secondary offering announced only four days earlier.
On August 24, Lintec repurchased 5,464,400 common shares for ¥29,999,556,000 (about ¥30.0bn) through the Tokyo Stock Exchange's off-auction ToSTNeT-3 mechanism, completing a buyback its board had authorized on August 20 with a cap of 6.91 million shares and ¥30bn. Nippon Paper, a major Lintec shareholder, sold 5,357,800 of those shares directly into the buyback for ¥29.4bn, at ¥5,490 a share.
Because Nippon Paper was also the selling shareholder in Lintec's underwritten secondary offering announced on August 20, that direct sale reduced the block still headed to outside investors. The underwritten tranche falls to 12,436,600 shares from 17,095,500, and the over-allotment cap drops to 1,865,400 shares from 2,564,300, Lintec said.
| Tranche | Before buyback | After buyback |
|---|---|---|
| Underwritten offering | 17,095,500 shares | 12,436,600 shares |
| Over-allotment (cap) | 2,564,300 shares | 1,865,400 shares |
Mizuho Securities remains the lead underwriter for the over-allotment tranche, which it will fill by borrowing shares from Nippon Paper. The transaction locks in a gain for Nippon Paper regardless of how the reduced offering eventually prices: the company expects to book an extraordinary gain of roughly ¥26.3bn on a non-consolidated basis and ¥12.3bn on a consolidated basis for the fiscal year ending March 2027.
Lintec has committed to avoid dividend cuts through the same fiscal year while targeting a 40% payout ratio or 3% dividend on equity, and it cited that policy, alongside easing supply-and-demand pressure from the pending offering, as the rationale for the buyback. The price for the remaining offering shares, and the final over-allotment size, will not be fixed until a pricing date sometime between September 1 and September 3.