Cerberus is selling the bulk of its shares in Aozora Bank in a global offering that could raise as much as $1.8 billion for the US-based private equity group nearly a decade after it first invested in the Japanese lender.

Aozora’s largest shareholder is offering 632.5 million shares to investors, including an overallotment, which represents up to 38 per cent of the bank’s outstanding shares. The sale comes as the Tokyo stock market has enjoyed a surge in buying on expectations the new government will act more aggressively to break deflation’s hold on the economy.

Aozora’s shares, which closed at 250 yen yesterday, have gained 64 per cent since hitting a low of Y152 on June 4th last year. They dropped 10 per cent yesterday after reports of plans for the large share sale. – (Copyright The Financial Times Limited 2013)