Kennedy-Wilson Plans IPO for Japanese Unit

Real estate investment and management firm Kennedy-Wilson Inc. plans to raise $10 million through an initial public offering of its Japanese subsidiary.

Officials at the Beverly Hills-based firm said they expect to receive approval today from Japanese exchange officials to sell about 75,000 shares in Kennedy-Wilson Japan on Nasdaq Japan, which is affiliated with the Osaka Stock Exchange. Trading is scheduled to begin Oct. 29.

Kennedy-Wilson officials said they expect the IPO will be well received despite Japan’s depressed economy and troubled real estate market. The firm has operated in Japan since 1989 and amassed a large portfolio of real estate and real estate securities at deep discounts.

“Our business there is really predicated on taking advantage of the distressed market,” said company Chairman and Chief Executive William J. McMorrow. “The IPO is the logical next step in the growth progression of the company.”

Only about 20% of the IPO shares will be sold to the public. The remainder will be split between the U.S. parent company, which will retain a 60% ownership stake, and the management of the Japanese unit.

Each Kennedy-Wilson share will be priced at $2,500, which is extremely high by U.S. standards but in keeping with Japanese stock pricing policies, McMorrow said. Proceeds from the offering, which is being underwritten by Nikko Salomon Smith Barney, will be used to finance growth and reduce debt, said company officials.

Shares of the parent company are traded on Nasdaq in the U.S. On Thursday, Kennedy-Wilson shares were down 5 cents to close at $3.45.