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Fuji Television, Livedoor lay down arms

Peace agreement * The deal ends two months of fighting after Livedoor launched a hostile takeover of Nippon Broadcasting * Under the deal, Fuji TV will increase its holdings in Nippon Broadcasting to 68.87 percent * Livedoor will retain a 17.6 percent stake, reducing its 50 percent holding * Fuji TV will also spend ¥44 billion to buy 133.74 million new shares in Livedoor, which will give it a 12.75 percent stake in the company

Fuji Television Network Inc, Japan's biggest broadcaster, agreed to pay rival Livedoor Co about ¥147.4 billion (US$1.4 billion) and form an alliance, ending a two-month hostile takeover bid for its radio affiliate.

Increased holdings

Tokyo-based Fuji TV will initially raise its stake in radio network Nippon Broadcasting System Inc to 68.87 percent and will buy remaining shares on Sept. 1. Internet portal Livedoor will keep 17.6 percent of the company for now, reducing its 50 percent holding, Fuji TV and Livedoor said today in statements to the Tokyo Stock Exchange.

Livedoor, owned by 32-year-old Takafumi Horie, began a hostile bid for Nippon Broadcasting in February in a quest to form a company spanning the Internet and broadcast media.

Livedoor's control of Nippon Broadcasting then forced Fuji TV to take steps to prevent itself from becoming a takeover target because of cross-shareholdings with the radio company.

"Horie gained fame and popularity, which led Livedoor to get more hits" on its Web sites, said Yoshio Shima, a partner at Ottoman Capital, a Tokyo-based hedge fund. "For Fuji TV's part, they could have controlled Nippon Broadcasting at a cheaper cost if not for Livedoor."

Fuji to buy shares

As part of the agreement, Fuji TV will also spend ¥44 billion to buy 133.74 million new shares in Livedoor at Friday's closing share price of ¥329, giving it a 12.75 percent stake in the Tokyo-based company.

Fuji TV will pay ¥6,300 for each of the Nippon Broadcasting shares held by Livedoor, close to what Livedoor paid.

Nippon Broadcasting and Fuji TV are part of the Fujisankei Communications Group, the largest media organization in Japan.

Acquisitions

Livedoor, which has a market value of about ¥226 billion, acquired 17 companies last year as it expanded its Internet services.

Livedoor shares rose 6.4 percent to ¥350 in Tokyo.

Nippon Broadcasting shares, currently 36.5 percent owned by Fuji TV, fell 1.2 percent to ¥5,880. Fuji TV's shares fell 3.5 percent to ¥222,000.

The companies released their announcements after equity markets closed in Japan.
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