Yahoo Japan Corp is blunting the impact of a large stock sale by a big shareholder, buying back US$2 billion of its shares in a complicated deal with Softbank Group Corp.
The deal was triggered by Altaba Inc, which in February said that it would start divesting its 35 percent stake in Yahoo Japan, fueling a sell-off of the Japanese Web portal as investors braced for the prospect of more shares hitting the market.
Altaba was created last year when Yahoo Inc was sold, so that its lucrative stakes in Yahoo Japan and Alibaba Group Holding Ltd (阿里巴巴) could be carved out.
The plan, announced by the parties yesterday, is for Softbank to buy 11 percent of Yahoo Japan from Altaba, and then for Yahoo Japan to buy back its own shares from Softbank.
The entire transaction essentially lets Yahoo Japan remove a major overhang from its stock, while keeping its relationship with Softbank mostly the same.
Yahoo Japan investors cheered the news, sending the company’s shares climbing as much as 13 percent.
What remains uncertain is what the parties will do when Altaba decides to sell more of its stake in Yahoo Japan, now at 27 percent.
“No one really expects Softbank to take a majority stake,” said Kazunori Ito, an analyst at Morningstar Investment Services in Tokyo. “This still leaves the question of what will happen to Altaba’s remaining stake.”
Softbank Group founder Masayoshi Son has previously said he prefers to keep a minority stake in Yahoo Japan.
After yesterday’s deal, Softbank’s ownership in the company would remain at about the same levels, at 48.17 percent.
The risk of a sell-off was compounding an already bleak outlook for Japan’s most popular Internet portal.
Yahoo Japan in April said profit fell for the second consecutive year, a trend that analysts project to continue in the current fiscal period.
The company’s advertising business has reached a plateau and there are doubts that can expand its e-commerce market share against rivals, such as Amazon.com Inc and Rakuten Inc, Ito said.
Yahoo Japan had ￥868 billion (US$7.8 billion) in cash and equivalents as of March 31.
Softbank’s mobile unit, which on Monday announced its filing for an initial public offering, is to hold the shares acquired from Altaba.
Softbank said the transaction is aimed at letting its wireless business and Yahoo Japan, which has its own discount mobile service, collaborate more closely.
They also plan to work together with Softbank’s portfolio companies, such as the office-sharing start-up WeWork Cos, Slack Technologies Inc and construction start-up Katerra Inc.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate
A Bollywood actor’s face tattooed on his arm, Sandeep Bacche’s devotion shocks few in India where stars enjoy semi-divine status, but even there the hallowed silver screen might be losing its shine to streaming services and pandemic fears. “Whenever things get better and theaters begin operations, I will watch three movies a day for sure just as a way to celebrate,” said the Mumbai rickshaw driver, who is recovering from the virus himself. However, others might not join the party. With cinemas shut for months due to a COVID-19 lockdown, and little prospect they will reopen soon, frustrated Bollywood producers have turned to