SoftBank renews talks on taking the group private

Platform News: Japan's SoftBank

SoftBank Group executives are considering carrying the Japanese tech group private as the company seeks a fresh plan after disposing of many large assets, the Financial Times has reported.

The discussions are driven by frustrations over the continuous discount in SoftBank’s equity evaluation as well as the value of its individual holdings, which continues even after an asset purchase programme tried to close that gap, the Financial Times said, citing people knowledgeable about the issue.

A SoftBank spokeswoman declined to comment on the FT report when contacted by journalists at our partner news agency Reuters.

Stocks in SoftBank, which can be directed by billionaire Masayoshi Son, on the Tokyo Stock Exchange are a bit over 10 percent up to now in 2020 and are trading in 1,307.50 yen. This is a steeper fall than Japan’s Nikkei 225 Index and below the 1,500 cost where it sold units in its own 2018 initial public offing (IPO).

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The IPO nearly two decades ago, still Japan’s biggest-ever stock exchange listing, has been widely considered at the time as finalising the band’s transition from national telecommunications firm to a monolithic global technology investor.

Yet since SoftBank has faced a multitude of challenges including losses on investments made by its $100 billion Vision Fund, activist pressure from hedge fund Elliott Management and queries regarding substantial option purchases throughout the recent run-up in the US stock market.

The discussions on taking SoftBank private happen to be speeded up because of variety of fundamental changes to SoftBank’s business plan to be a long-term investor in businesses instead of a director of companies, according to the Financial Times.

SoftBank’s recent investment track record has been checkered, including a particularly large bet on the prospects of shared office provider WeWork, resulting in SoftBank reporting an $18 billion decrease at the Vision Fund in May, pushing the conglomerate to a record loss.

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SoftBank is nearing a deal to sell state-of-the-art UK chip designer Arm Holdings, which it bought for about $32 billion in 2016, to Nvidia Corp for more than $40 billion, A deal we reported on earlier.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Sabahatjahan Contractor in Bengaluru and Joshua Franklin in Boston. Editing by Lisa Shumaker.

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