Honda Motor announces secondary share sale valued at USD 3.16 billion

Honda Motor has set the price for its secondary share sale at 1,664.5 yen per share, representing a 3% discount from Wednesday's closing price. The total value of the share sale amounts to 497 billion yen, or approximately USD 3.16 billion. This valuation includes an overallotment option that may be exercised based on investor demand.

The share sale constitutes the primary sellers which include insurers and financial institutions such as Tokyo Marine, Sompo, and Mitsubishi UFJ. These entities intend to offer as many as 300 million Honda shares on the market in aggregate. The fact of this sale was disclosed by internet earlier this month by Reuters.

Cross-shareholding was previously implemented as a part of Japanese business ethic where companies invested in each other with the aim of cementing their business ties. This practice of separate classes of shares has received criticism from governance experts and foreign investors because it can be used to shield management from the other shareholders.

This secondary share sale is another key step for Honda as the firm repositions itself based on changing conditions and regulation in the market place and future globalisation of corporate governance systems.