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UPDATE 2-Resona to raise lower-than-expected $6.6bln

Published 01/24/2011, 05:42 AM

*To raise up to Y544.8 bln vs previous estimate of Y575.3 bln

*Offer price represents 5.8 pct discount to Monday's close

*Discount may reflect weak demand - fund manager (Recasts and adds details, fund manager comment)

TOKYO, Jan 24 (Reuters) - Resona Holdings said it would raise a lower-than-expected $6.6 billion in its global share offering, in a sign investors are skeptical of the Japanese bank's growth prospects as it weans itself from government control.

Japan's No. 4 bank, which had first flagged the share sale in November and announced its launch earlier this month, said on Monday it would sell the shares at 440 yen each, raising up to 544.8 billion yen. ($6.6 billion).

The per share price represents a 5.8 percent discount to Monday's close of 467 yen. That is unusually steep for Japan, where the discount on offerings is typically 3 to 5 percent.

"That pricing might have come in response to the feeling of market participants, including me, that Resona shares get attractive if their price goes below 450 yen," said Sompo Japan Nipponkoa Asset Management fund manager Shigeo Sugawara.

When it announced the launch of the share offering on Jan. 7, Resona estimated it could raise about 575.3 billion yen. The stock fell about 11 percent since then, dragging down the price it could charge investors in the sale.

Resona will use the funds to buy back state-owned preferred shares, putting a dent in the 1.7 trillion yen it still owes the taxpayer from bailouts in the late 1990s and in 2003, when it nearly collapsed under a mountain of bad loans.

A Resona spokesman said there was sufficient demand for the offering both in Japan and overseas, where it will offer 45 percent of the shares. He declined to disclose the actual size of the subscription. (Reporting by Taiga Uranaka; Editing by Chris Gallagher and Nathan Layne)

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