SoftBank weighs largest IPO ever for domestic wireless business

The Apple Inc. iPhone series is displayed at a SoftBank Group Corp. store in Tokyo, Japan, on Thursday, Feb. 22, 2018. Photographer: Akio Kon/Bloomberg

SoftBank Group Corp. is considering seeking a valuation of about $90 billion for its domestic wireless business in a planned initial public offering, according to people familiar with the matter.

SoftBank is speaking to advisers about selling a third — or about $30 billion — of the business in the IPO, the people said, asking not to be named as the talks aren’t public. Discussions are preliminary and the final valuation will depend on investors’ feedback, they said.

A representative for SoftBank declined to comment.

A $30 billion-IPO would make SoftBank Mobile the largest listing ever. Alibaba Group Holding Ltd. made its market debut in 2014 with a $25 billion offering, the biggest so far. SoftBank is seeking a higher price-to-earnings premium for its wireless business than its closest publicly traded peers, NTT Docomo Inc. and KDDI Corp., the people said. Shareholders believe the cash-rich company’s guaranteed dividend yield as well as its technology partnerships and the benefits of being linked to the parent firm, may help achieve that higher valuation, they said.

NTT Docomo ended Monday with a market value of almost $100 billion, while KDDI was at about $70 billion.

The SoftBank unit could be listed as early as the fourth quarter, the people said. Other companies coming to market this year with high expectations on valuations have found investors don’t always agree with them. Chinese smartphone maker Xiaomi Corp. currently has a market value of almost $50 billion following its debut in July, or just half of the figure touted when it began the process in 2017.

SoftBank founder Masayoshi Son said in his investor presentation Monday that he’s working toward a listing on the Tokyo Stock Exchange. The division’s free cash flow more than doubled to 154 billion yen ($1.4 billion) in the three months ended June.

The internet has been at the heart of Son’s vision of the future for years. During the advent of mobile internet via the smartphone, the billionaire got exclusive rights to sell the iPhone in Japan.

But recently, Son has begun turning SoftBank into a giant investment portfolio — with money injected into industries ranging from ride-hailing to co-working spaces — while looking to offload mobile assets. In April, SoftBank agreed to sell a controlling stake in Sprint Corp. — its U.S. telecommunications business — to T-Mobile US Inc.

Bloomberg

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.