Honda Motor Prices Secondary Shares At Discount In $3.16B Sale

Honda Motor Co (NYSE: HMC ) has announced the selling price for the secondary offering of its common stock, which was approved at the Executive Council meeting held on July 4, 2024.

The shares for secondary sale are priced at 1,664.5 yen each, representing a 3% discount to Wednesday’s closing price.

The total value of the deal is estimated at 497 billion yen ($3.16 billion), the automaker disclosed.

Insurers and financial firms aim to sell as many as 300 million Honda shares, Reuters repored. The amount includes an overallotment option depending on demand, the report added.

Those selling shares include insurers and financial firms such as Tokyo Marine Holdings Inc. (OTC: TKOMY ), Sompo Holdings Inc , and Mitsubishi UFJ Financial Group Inc. (NYSE: MUFG ).

Also Read : Honda Restructures in Thailand: Ayutthaya Factory Reportedly Shifts Focus Amid EV Competition

The practice of cross-shareholding, where companies hold shares in each other, has been a long-standing method in Japan to strengthen business relationships.

However, governance experts and international investors argue that it shields management from shareholder influence, raising concerns about corporate governance standards.

In December, Japan's Financial Services Agency issued a business improvement order to the four insurers, Tokyo Marine Holdings, Sompo Holdings, and two units of MS&AD Insurance Group Holdings after discovering they had colluded to fix corporate insurance fees.

The regulator mandated the reduction of cross-shareholdings, further pressing the insurers to unwind these financial entanglements.

Price Action : HMC shares closed higher by 0.22% at $32.56 on Tuesday.

Disclaimer : This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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