TOKYO--Seibu Holdings Inc. priced its initial public offering at the bottom end of its proposed range, in a deal that would value the railroad and hotel operator at around $5.4 billion.

After taking orders for a week, Seibu Holdings on Monday priced its IPO at Yen1,600 ($15.74), the bottom end of the proposed range of between Yen1,600 and Yen1,800 per share.

The pricing came as the Tokyo stock market has lost momentum over the past month. Global investors are becoming more selective about Japanese shares amid growing skepticism toward "Abenomics," Prime Minister Shinzo Abe's effort to promote economic growth.

Bankers also say that Seibu's listing was hurt by the poor performance of two recent major IPOs: Japan Display Inc. and Hitachi Maxell Ltd.

On March 18, Hitachi Maxell made its debut on the Tokyo stock market, sinking 14% below its IPO price. The following day, Japan Display, the world's biggest maker of screens for smartphones and tablets, ended its trading debut down 15%.

The Nikkei Stock Average is down 17% this year, ranking as one of the world's worst-performing major markets. Trading volume has been low.

Because the price range Seibu set last week was lower than expected, its top shareholder, Cerberus Capital Management, decided not to sell shares in the listing. Seibu said on April 9 it was seeking a price of between Yen1,600 and Yen1,800 per share, beneath earlier guidance of Yen2,300.

Cerberus will continue to hold its current 35.4% stake, reversing an earlier plan to sell 15.5% of the company's shares in the IPO.

Despite Cerberus's decision, Seibu still plans to go public on April 23. The company's other major shareholders, including Norinchukin Bank and Development Bank of Japan, intend to sell their shares.

Write to Atsuko Fukase at atsuko.fukase@wsj.com

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