SoftBank plans to sell a third of its shares in its Japanese telecoms unit for ¥1.47 trillion (€12 billion), raising expectations that Masayoshi Son, its chief executive, is gathering firepower for more acquisitions.
The announcement of a sale of 1.03 billion shares in SoftBank Corp, the separately listed telecoms subsidiary, including an over allotment option, was more than analysts expected and may raise as much as ¥1.47 trillion.
The sale will reduce SoftBank’s stake in its lucrative mobile business from 62.1 per cent to 40.4 per cent.
SoftBank announced it would sell ¥4.5 trillion of assets in March to pay down debt and buy back shares, but the telecom share sales would push it past that total, suggesting to some analysts that the group is readying itself to make new investments. SoftBank said it wanted to have the flexibility to “respond to changes in the market environment”.
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Mio Kato, an analyst who writes on the Smartkarma platform, noted that while SoftBank pledged to hold its remaining stake in the telecoms unit for the medium to long term, the company’s recent activity meant the “medium term can probably be measured in months”.
He added that the huge share sale “seems like the first step towards a full exit and [SoftBank’s] transformation into a pure hedge fund”.
Risks
The risks surrounding such a transition are already a focus of market attention as key members of Mr Son's board – notably Jack Ma and the Uniqlo founder Tadashi Yanai – have departed and analysts have raised questions over governance.
Shares in the domestic mobile carrier fell to ¥1,432 on Friday, up 10.5 per cent from its low in April, while those in the Tokyo-listed conglomerate have soared to a 20-year high.
SoftBank Corp said in a statement that the sale would “increase market liquidity, which would lead to appropriate pricing of our shares”.
SoftBank bounced back from a historic loss to post a $12 billion quarterly profit this month but Mr Son cautioned the group remained in “crisis mode”, seeking to raise funds as he weighed the sale of £24 billion UK chipmaker Arm.
Since SoftBank announced it would sell assets in March, it has committed to selling a large slice of its holding in Alibaba as well as most of its stake in the US arm of T-Mobile. The plan has helped to push the company's share price to a 20-year high and Marcelo Claure, SoftBank's chief operating officer, said the company was "better positioned than it's ever been" to do deals. – Copyright The Financial Times Limited 2020
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