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Line applies to TSE for IPO that could see value exceed ¥1 trillion

Bloomberg

Line Corp., operator of Japan’s most popular mobile messaging service, has submitted an application for an initial public offering to the Tokyo Stock Exchange, sources said.

Line, controlled by South Korea’s Naver Corp., plans to appoint Nomura Holdings Inc. as lead underwriter for the share sale, according to the sources.

The offering could value Tokyo-based Line at more than ¥1 trillion, they said, asking not to be identified as the deliberations are private.

The company’s planned U.S. listing may come after its Tokyo trading debut, another source said. Line is working with Nomura and Morgan Stanley to prepare for an IPO as soon as November, and is considering a listing on the Tokyo bourse and either the New York Stock Exchange or Nasdaq, people familiar with the situation said last month.

Line is pursuing a share sale after e-commerce operator Rakuten Inc. acquired Viber Media Ltd., and Facebook Inc. agreed to buy rival messaging service WhatsApp Inc. for as much as $19 billion.

Japanese initial public offerings have raised $6.7 billion this year, down from $7.9 billion in the same period in 2013, data compiled by Bloomberg show.

Fumiko Hayashi, a Tokyo-based spokeswoman for Line, declined to comment. Kenji Yamashita, a spokesman for Nomura, and Mika Watanabe, a spokesperson for Morgan Stanley, also had no comment.

Line’s messaging app surpassed 480 million users this month, COO Takeshi Idezawa said in Tokyo on Friday. About 85 percent of subscribers are located outside Japan, the company said in February.

Revenue for Line’s core business more than tripled in the first quarter to ¥14.6 billion, it said in a May 8 statement. The company has added features such as games, comics, free voice and video calling, photo and video sharing, and tie-in apps, including a camera.

Gumi Inc., the Tokyo-based developer of mobile games, including “Brave Frontier,” is planning an IPO as soon as December that may value the company at about ¥100 billion, people with knowledge of the matter said earlier this month. Recruit Holdings Co., a provider of staffing services, is preparing an IPO that may take place as soon as in October, sources said in May.

Line, which has 666 employees, started providing its messaging application after the March 2011 Great East Japan Earthquake knocked out telephone services, according to its website.