Nomura in talks to sell real estate arm: report

Wed Nov 23, 2011 12:44pm GMT

A man passes a branch of Nomura Securities in Tokyo November 1, 2011. REUTERS/Yuriko Nakao

A man passes a branch of Nomura Securities in Tokyo November 1, 2011.

Credit: Reuters/Yuriko Nakao

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(Reuters) - Nomura Holdings Inc (8604.T) has started talks to sell domestic businesses including its real estate arm, the Financial Times reported, as Japan's top brokerage rushes to beef up cash in an ailing stock market.

Nomura was considering the sale of Nomura Real Estate Holdings Inc (3231.T) and its consulting arm, Nomura Research Institute, the newspaper said on Tuesday, and was in preliminary talks with private equity buyers.

The report cited several people familiar with the talks, including the Japan head of a private-equity firm that has taken part.

Talk has been circulating for close to a month that Nomura Real Estate is on the block. The listed holding company has a market capitalization of $2.8 billion and property developer, Nomura Real Estate Development as its key business.

Two private equity fund managers told Reuters that Nomura had approached private equity buyers to discuss the sale of individual properties. One said they had also discussed the sale of the whole business.

Selling both Nomura Real Estate and Nomura Research Institute as a block would be a major boost to Nomura's capital base.

There was no formal auction process in place, according to the article, which said KKR & Co LP (KKR.N) and TPG Capital LP TPG.UL had been in talks with Nomura.

Nomura declined to comment.

Property market sources told Reuters that it would be difficult for one buyer to absorb all of Nomura Real Estate in one go.

A fund manager who runs a Japan fund said Nomura might also look to merge the real-estate business with another developer.

Fortress Investment Group LLC (FIG.N) is another potential suitor, the fund manager said, since Nomura owns a 12 percent stake in Fortress. Fortress did not immediately respond to calls for comment.

Earlier this month, Nomura posted its first quarterly loss in more than two years due to a slump in investment banking revenue.

(Additional reporting by Stephen Aldred and Kavyanjali Kaushik; Editing by Chris Lewis)

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