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.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
RECORD LOW: Global firms’ increased inventories, tariff disputes not yet impacting Taiwan and new graduates not yet entering the market contributed to the decrease Taiwan’s unemployment rate last month dropped to 3.3 percent, the lowest for the month in 25 years, as strong exports and resilient domestic demand boosted hiring across various sectors, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. After seasonal adjustments, the jobless rate eased to 3.34 percent, the best performance in 24 years, suggesting a stable labor market, although a mild increase is expected with the graduation season from this month through August, the statistics agency said. “Potential shocks from tariff disputes between the US and China have yet to affect Taiwan’s job market,” Census Department Deputy Director Tan Wen-ling
RSS