Marui: ¥50bn CB, ¥15bn Buyback to Fuel Fintech Growth

On Aug. 24, 2026, Marui set terms for its euro-yen denominated convertible bonds with stock acquisition rights due 2031. The total is ¥50 billion, with payment on Sept. 9, 2026 and maturity on Sept. 30, 2031. The bonds carry a zero coupon and were priced at 102.5% of face value. The conversion price is ¥3,231, 7.99% above the previous close of ¥2,992.0. Based on shares outstanding excluding treasury stock as of July 31, 2026, potential dilution from the underlying shares is 8.64%. The exercise period runs from Sept. 23, 2026 to Sept. 16, 2031. The bonds will be offered in Europe and Asia and listed on the Singapore Exchange.

Net proceeds of approximately ¥50 billion will be allocated as follows.

Around ¥35 billion will go to loans and investments for group companies, mainly fintech operations. At Epos Card, credit card transaction volume and membership are increasing, expanding funding needs for merchant settlement payments and advances. Other subsidiaries also require funds for systems, digital infrastructure, and operating capital. The remaining ¥15 billion will fund share buybacks, to be executed flexibly by May 15, 2027. If shares are repurchased before the payment date, part of the proceeds may be used for cash on hand or repayment of borrowings. This concretizes the policy of prioritizing growth businesses while returning capital to shareholders, and is expected to cushion the supply demand impact from the CB issuance.

On the same day, Marui announced it will buy back 5,013,300 shares, or 2.80% of shares outstanding excluding treasury stock, through the Tokyo Stock Exchange's ToSTNeT-3 on Aug. 25 at 8:45 a.m. The total acquisition cost is ¥14,999,793,600 (approximately ¥15 billion), at ¥2,992.0 per share, the same as the previous close. This is based on a board resolution from Aug. 4, 2026 authorizing up to 10,000,000 shares and ¥20 billion, with an acquisition period from Aug. 10, 2026 to May 15, 2027. The immediate same-day buyback alongside the CB issuance aims to mitigate the short-term share supply impact. Some or all of the buyback may not be executed depending on market conditions. Marui plans to continue share repurchases after this, considering the market environment and regulations, to return profits to existing shareholders and improve EPS.

The scheme aims to combine growth investment funding with improved capital efficiency. The zero-coupon CB reduces cash interest costs, while the conversion price above market curbs EPS dilution. Step-up conversion restrictions and a call provision were added to protect existing shareholders. The simultaneous buyback cushions the equity supply impact and lifts ROE and EPS. By building an optimal capital structure with buybacks and convertible bonds, Marui seeks to lower its cost of capital and enhance shareholder value. Under its management vision toward FY ended March 2031, the company targets higher ROE. In FY3/2026, actual ROE was 11.6%, the consolidated payout ratio was 82.7%, and DOE was 9.6%. The annual dividend per share of ¥131.00 in FY3/2026 marked the third consecutive increase from ¥101.00 in FY3/2024.