Wed, Feb 26, 2014 - Page 15 News List

SoftBank seeking stake in Naver’s Line app: sources

THE ‘IT’ APP:The South Korean firm’s messaging service has 340m users worldwide and is No. 1 in Taiwan, Japan and Thailand, leading BNP to value it at US$15bn in a year

Bloomberg

SoftBank Corp is seeking to buy a stake in Line Corp, the mobile messaging service controlled by South Korea’s Naver Corp, people with knowledge of the matter said.

Line has received at least one other offer for all or some of the company, prompting it to slow preparations for an initial public offering, two of the people said.

The Tokyo-based company, which has about 340 million users, may be worth as much as U$14.9 billion in a year, according to BNP Paribas SA estimates.

This month, Facebook Inc said it would pay as much as US$19 billion to acquire WhatsApp Inc, just days after Japan’s Rakuten Inc agreed to pay US$900 million for rival Viber.

“Line has tremendous momentum right now,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co in Tokyo. “They have a lot of users and they are using it [the app] actively.”

Naver shares jumped as much as 8.8 percent in Seoul trading yesterady, the most intraday in almost three weeks, while SoftBank rose as much as 4.4 percent in Tokyo.

SoftBank founder and billionaire Masayoshi Son has held talks with Line about the purchase, a source said.

Japan’s No. 3 wireless company, which also controls Sprint Corp in the US, has been acquiring stakes in providers of content, including China’s Wandoujia (豌豆莢) and Finnish game maker Supercell Oy.

While Line is still aiming for an initial public offering later this year, it wants to take some time to evaluate the proposals, another source said. Selling a stake to a larger company could help Line increase its valuation ahead of the share sale, according to that person.

Tokyo-based SoftBank spokesman Mitsuhiro Kurano and Line spokeswoman Fumiko Hayashi declined to comment on the reported bid, while Naver spokesman Nam Ji-woong said the company was not aware of interest from the Japanese telecom.

Line is the No. 1 mobile messenger service in Taiwan, Japan and Thailand, beating Facebook Messenger in all three countries, according to a report from Samsung Securities Co released on Thursday last week that cited data from researcher App Annie Ltd.

Line also ranks highly in Chile and Mexico, where it competes with Microsoft Corp’s Skype, as well as in South Korea, where it competes with KakaoTalk.

Line generated about ¥34.3 billion (US$335 million) in revenue last year from its core business by selling games and “stickers” — cartoons or illustrations that users can send to friends — Line said this month.

Growth in India and Latin America could help the app’s registered user base rise to 525 million by the end of this year, BNP Paribas analyst Justin Lee wrote in a note to clients last week.

Lee estimates Line may be worth as much as 16 trillion won (US$14.9 billion) in a year’s time.

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