Softbank Group Corp is seeking to raise ￥2.4 trillion (US$21.1 billion) in the initial public offering (IPO) of its Japanese telecom operations next month, raising more capital to fuel investments for its US$100 billion Vision Fund.
The Japanese technology giant yesterday said in a prospectus that it would sell 1.6 billion shares at ￥1,500 apiece in a new entity called Softbank Corp, which is to start trading in Tokyo on Dec. 19.
At the indicated price, the business is being valued at ￥7.18 trillion.
This is Japan’s biggest-ever IPO, topping the listing of the former national carrier Nippon Telegraph & Telephone Corp in 1987.
Softbank founder Masayoshi Son is listing the company’s cash cow to raise capital and keep making investments in tech start-ups.
The offering comes at a time when the wireless unit faces potential pricing pressure. Rival NTT Docomo Inc has announced plans to cut rates 40 percent in response to government pressure to reduce peoples’ telephone bills.
At the same time, Japanese Web retailer Rakuten Inc is jumping into the market as a budget provider.
“Market sentiment is not as good as it used to be, and investor appetite may not be so strong,” said Yasuhide Yajima, chief economist at NLI Research Institute in Tokyo. “Still, their focus is on data, AI and communication — industries where they can anticipate growth, so investors can’t exclude Softbank from their target.”
After the public listing, Softbank Group, the parent, is to hold about 63 percent of the wireless unit.
Softbank is targeting a dividend payout ratio of about 85 percent of net income, according to the filing.
Son has previously said that he was aiming for a higher dividend to provide cash for what has become his main occupation.
“The dividend payout ratio is very high,” Tokai Tokyo Research Center analyst Masahiko Ishino said.
“That provides an incentive” for investors at the IPO, he said. “By the same token, it will also bolster Softbank Group’s finances. Softbank Group is transforming into an investment company and investment companies want higher dividends, so this makes sense.”
The IPO price range is to be set on Nov. 30, followed by the final price on Dec. 10.
Softbank has forecast that the domestic telecoms operations, which include wireless, broadband and fixed-line services, would post ￥700 billion in annual operating profit.
It has close to 34 million wireless subscribers in Japan.
Softbank laid out numerous risks in the prospectus, saying Japan’s mobile and home broadband markets are “approaching saturation.”
It also singled out Suga’s comments this year about forcing carriers to lower rates and cited pressure from Docomo’s decision to slash fees.
“We may not be able to accurately predict, prevent or effectively react to new laws and regulations,” Softbank said in the prospectus. “Our ability to set prices for those services and products could be limited.”
KEEPING UP: The acquisition of a cleanroom in Taiwan would enable Micron to increase production in a market where demand continues to outpace supply, a Micron official said Micron Technology Inc has signed a letter of intent to buy a fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion to expand its production of memory chips. Micron would take control of the P5 site in Miaoli County’s Tongluo Township (銅鑼) and plans to ramp up DRAM production in phases after the transaction closes in the second quarter, the company said in a statement on Saturday. The acquisition includes an existing 12 inch fab cleanroom of 27,871m2 and would further position Micron to address growing global demand for memory solutions, the company said. Micron expects the transaction to
Vincent Wei led fellow Singaporean farmers around an empty Malaysian plot, laying out plans for a greenhouse and rows of leafy vegetables. What he pitched was not just space for crops, but a lifeline for growers struggling to make ends meet in a city-state with high prices and little vacant land. The future agriculture hub is part of a joint special economic zone launched last year by the two neighbors, expected to cost US$123 million and produce 10,000 tonnes of fresh produce annually. It is attracting Singaporean farmers with promises of cheaper land, labor and energy just over the border.
US actor Matthew McConaughey has filed recordings of his image and voice with US patent authorities to protect them from unauthorized usage by artificial intelligence (AI) platforms, a representative said earlier this week. Several video clips and audio recordings were registered by the commercial arm of the Just Keep Livin’ Foundation, a non-profit created by the Oscar-winning actor and his wife, Camila, according to the US Patent and Trademark Office database. Many artists are increasingly concerned about the uncontrolled use of their image via generative AI since the rollout of ChatGPT and other AI-powered tools. Several US states have adopted
A proposed billionaires’ tax in California has ignited a political uproar in Silicon Valley, with tech titans threatening to leave the state while California Governor Gavin Newsom of the Democratic Party maneuvers to defeat a levy that he fears would lead to an exodus of wealth. A technology mecca, California has more billionaires than any other US state — a few hundred, by some estimates. About half its personal income tax revenue, a financial backbone in the nearly US$350 billion budget, comes from the top 1 percent of earners. A large healthcare union is attempting to place a proposal before
RSS