Softbank Corp, Japan’s third-largest mobile phone company, yesterday said it would acquire rival eAccess Ltd for ￥52,000 (US$667) a share, valuing the smaller company at about ￥180 billion.
Softbank president Masayoshi Son said his company was “not overpaying” for eAccess.
The stock transaction, which values eAccess at almost three times yesterday’s closing price, will help Softbank compete against bigger competitors NTT DoCoMo Inc and KDDI Corp, Son said at a press briefing in Tokyo.
Billionaire Son’s wireless carrier may use eAccess’ bandwidth to expand as increases in the number of smartphone users require more data capacity.
Softbank has surged 37 percent this year in Tokyo trading, outperforming NTT DoCoMo and KDDI, and adding subscribers as Japan’s first carrier to offer Apple Inc’s iPhone and iPad.
“The cost may be expensive, but it erases a risk that Softbank will face a shortage of spectrum,” said Shinji Moriyuki, an analyst at SMBC Nikko Securities in Tokyo.
“Softbank’s weakness has been a lack of bandwidth,” he said.
The deal was reported earlier by the Nikkei Shimbun. EAccess surged 26 percent to ￥19,000 in Tokyo trading, the most since its 2003 listing, after the Nikkei report and before trading was halted by the exchange.
Softbank will pay 16.74 of its shares for each share of eAccess, valuing the Tokyo-based company’s stock at ￥52,000, Son said.
Softbank added more users in August than DoCoMo or KDDI and had 30.1 million subscribers at the end of the month, trailing DoCoMo’s 60.6 million and KDDI’s 35.9 million, according to data compiled by Bloomberg.
EAccess had 4.1 million subscribers as of June 30, according to its announcement in August.
EAccess had a market value of ￥52.2 billion at the close of trading in Tokyo on Friday. Softbank fell 1.7 percent to ￥3,105 at the end of trading yesterday, reversing an earlier gain of 0.6 percent.
EAccess will be converted into a wholly owned unit and will be delisted on Feb. 25.