Softbank buyout talk resurfaces
Group’s record loss irritates market
“There is little reason to be listed on the stock market. We think changes in the very form of the company, for example an MBO (management buyout), could be coming in the not-too-distant future.”
Satoru Kikuchi
TOKYO: Talk that Softbank Group Corp would be better off as a private company has resurfaced after the Japanese investment powerhouse posted a record Us$23bil (Rm102bil) loss.
Softbank has evolved rapidly over the last 10 years from a telecom company and strategic investor to the world’s biggest pool of tech capital.
It’ll look even more like a pure investment house as it continues to buy back its own stock and sell or pare assets, including its stake in Alibaba Group Holding Ltd.
“There is little reason to be listed on the stock market,” SMBC Nikko analyst Satoru Kikuchi wrote.
“We think changes in the very form of the company, for example an MBO (management buyout), could be coming in the not-too-distant future.”
Softbank founder Masayoshi Son – the company’s top shareholder with a near-28% stake as of end-march – has debated the idea of going private with his inner circle for at least five years.
When Softbank’s shares tumbled in 2020 at the outset of the coronavirus pandemic, he began conversations with advisers and lenders including Elliott Management Corp and Abu Dhabi sovereign wealth fund Mubadala Investment Co, Bloomberg News has reported.
That speculation evaporated after Son unveiled plans to sell about Us$43bil (Rm191.5bil) in assets to pay down debt and buy back stock.
The billionaire, who said in February 2020 he thought Softbank was better off as a public company, is now focused on getting chip linchpin Arm Ltd publicly listed, a landmark deal that could re-establish Softbank’s credentials in the ailing global tech market.
The company has committed to a series of big buybacks in recent years to bolster its stock price.
This week, it said it would buy up to 400 billion yen (Us$3bil or Rm13.36bil) of its own shares, on top of a programme to buy back up to one trillion yen (Rm33bil) worth of its stock through September.