Oracle Japan Stock Sale Raises $7.5 Billion

The Japanese subsidiary of Oracle Corp., the world’s largest database-software maker, raised $7.5 billion Monday in the second-biggest public stock offering in Tokyo Stock Exchange history.

Approximately 9.7 million shares were sold to satisfy criteria to list Oracle Japan shares on the Tokyo exchange and to raise money to finance the purchase of a new headquarters in Tokyo.

Buyers were probably “index funds, because it will have a visible weighting in the [Tokyo Price Index], and speculators,” said Yusof Shareza, who helps manage $650 million in Japanese equities at Aberdeen Asset Management Asia Ltd. in Singapore. “It’s a great business, and Oracle in the U.S. is doing well, too, but it’s a question of simple valuations.”

Oracle Japan shares have risen ninefold since they were first sold to the public in February 1999. Its shares now trade at almost six times the price of its U.S.-based parent.

Oracle Japan shares, which have fallen 13% since the sale started March 21, trade at a price-to-earnings ratio of 860 times. That compares with about 156 for Oracle Corp.

Redwood Shores, Calif.-based Oracle is the second largest software company in the world in terms of revenue, trailing only Microsoft Corp. The company made $1.9 billion in the last 12 months on sales of $9.7 billion.

The company makes database software that is primarily used by businesses for such tasks as inventory, purchasing, sales and personnel management.

The company has been an aggressive player in the Internet market, pushing its software as a way of managing complex Web sites and as a platform for online business-to-business marketplaces, which have become a powerful movement in e-commerce over the past few months.

Shares of Oracle, the parent company, fell $4.63 Monday to close at $82.50 in Nasdaq trading.

Oracle Japan is the country’s seventh-biggest public company by market value as of Monday’s close, bigger than Bank of Tokyo-Mitsubishi Ltd. and just after No. 6 Softbank Corp.

That will give it a weighting of about 1.6% of the Tokyo Price Index and helped it attract buyers who manage the estimated $75 billion of funds that track the benchmark index.

Individuals also bought the stock.