Shares in Livedoor Co, Takafumi Horie's Internet investment company, fell as much as 10 percent on concern its bid for parts of Japan's biggest media group will be foiled by billionaire rival Masayoshi Son.
Son's Softbank Investment Corp on Thursday agreed to borrow a 14 percent stake in Fuji Television Network Inc from Nippon Broadcasting System Inc, a takeover target of 32 year-old Horie.
The three companies will also set up a ?20 billion (US$188 million) fund to develop film, music and Internet programming.
The alliance may threaten Livedoor's plans to use its 50 percent stake in Tokyo-based Nippon Broadcasting to build an entertainment and information network spanning the Internet and broadcasting. Fujisankei Communications Group, which includes Fuji TV and Nippon Broadcasting, has been building defenses against Livedoor including raising dividends and preparing share sales.
"This is intended to crush Livedoor," said Tatsuyuki Kawasaki, a manager Kaneyama Securities Co's equities department in Tokyo, referring to the Softbank tie-up. "War has begun."
Livedoor fell as much as ?37 to ?332, its biggest drop since March 7. Softbank Corp, the largest shareholder of Softbank Investment, gained as much as 4.2 percent to ?4,520, the most in two months.
Softbank Investment advanced as much as 6.1 percent to ?42,550, the most in half a year. Fuji TV fell as much as 1.1 percent to ?282,000. Nippon Broadcasting fell as much as 7.1 percent to ?6,760. All the companies are based in Tokyo.
Horie and Son, 47, graduated from the same high school in Kyushu, southwestern Japan, and the Livedoor founder has said Son is one of his models. Son was ranked Japan's eighth-richest person in a March 11 Forbes Magazine survey, with a net worth of US$4.3 billion gained largely through investments in Internet companies.
Horie, who has said his wealth exceeded ?10 billion by the time he was 30, holds a third of Livedoor's shares, worth about ?72 billion at yesterday's price.
Livedoor is in talks with its lawyers to study whether it can cancel the agreement between Softbank Investment and Nippon Broadcasting, Kyodo News said, citing unnamed Livedoor officials.
A spokesman for the company declined to comment on the Kyodo report.
Livedoor's share price drop "implies market participants expect Livedoor has countermeasures for the Nippon Broadcasting's loan of Fuji TV shares to Softbank Investment," said Katsuhiko Shimokawa, head of investment advising company, Asset-Alive.com in Osaka.
Livedoor is the fastest-growing Web portal in Japan with 10.6 million users last month, rising two-thirds since September, according to a Nielsen/NetRatings survey of home-use personal computers, distributed by NetRatings K.K.
Yahoo! Japan Corp, which is 41.9 percent owned by Softbank, is the most-visited portal in Japan with 29.6 million users, according to the survey.
Nippon Broadcasting is listed as Fuji TV's largest shareholder with a 22.5 percent stake. On Feb. 23, the radio network said it would lend 220,000 shares of Fuji TV to Daiwa Securities SMBC Co, amounting to about 8.63 percent, according to Bloomberg data.
Livedoor had 49.8 percent of Nippon Broadcasting's voting rights as of March 15, giving it potential influence over Fuji TV through the company's stake in the television company.
More than 50 percent is required to be able to make key decisions such as appoint directors to the board, and yesterday was the final day for holders of Nippon Broadcasting to register to vote at its annual shareholders' meeting in June.
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