SoftBank Corp to spend $4b to hike Yahoo Japan stake to 45%

Yahoo Japan Corp. employees speak to a customer in front of the company's logo at its headquarters in Tokyo, Japan, on Tuesday, June 18, 2013. Yahoo Japan, operator of the country's most-visited Web portal, targets at least 10 percent gain in revenue from advertisement this fiscal year on corporate demand, as the economy shows signs of improvement. Photographer: Akio Kon/Bloomberg

Japanese telco SoftBank Corp said on Wednesday it would spend $4 billion to up its stake in Yahoo Japan Corp and turn the internet company into a subsidiary, a move that would help boost its profit by 24 percent this year.

The telco said it would buy 456.5 billion yen ($4.2 billion) worth of new shares to be issued by Yahoo Japan, increasing SoftBankCorp’s stake to 45 percent from 12 percent.

With that addition, SoftBank Corp, which listed in December in Japan’s largest-ever initial public offering, forecast its operating profit would rise to 890 billion yen in the current financial year through March 2020.

SoftBank Corp will buy the shares at 302 yen each, or a 2.3 percent discount to Wednesday’s closing price.

Separately on Wednesday, SoftBank Corp’s parent SoftBank Group Corp said it would sell its 36 percent stake in Yahoo Japan back to the internet company.

The deal will strengthen cooperation between SoftBank Corp, Japan’s third-largest telco, and Yahoo Japan, an internet heavyweight in areas such as news and shopping.

The closer relationship will help drive growth at shared ventures such as QR code payment app PayPay, SoftBank Corp Chief Executive Ken Miyauchi said at a news conference.

Concern over the outlook for Japan’s telcos, which face government pressure to cut carrier fees as well as competition from new entrant Rakuten Inc, has kept SoftBank Corp shares below their IPO price. The stock closed up 0.6 percent ahead of the earnings.

Some analysts see the telco as well positioned to weather the price squeeze as it targets data-heavy smartphone users with premium-priced plans while offering low-cost options for thrifty customers under separate branding.

The telco reported a 17 percent drop in fourth-quarter operating profit to 84.5 billion yen from a year earlier, even as revenue grew. The result missed the 93 billion yen average of three analyst estimates compiled by Refinitiv.

SoftBank Corp, with its ample cashflow, is a key indicator of the health of parent SoftBank Group, which reports its fourth-quarter earnings on Thursday.

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Reuters

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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.