TOKYO (Reuters) – SoftBank Group Corp (9984.(T) is to buy back up to $4.8 billion of its shares after their recent slump, in a move that partly responds to the demands of activist fund Elliott Management, but it does not calm down, investors will panic out of the corona virus a pandemic.
FILE PHOTO: People walk behind the logo of SoftBank Corp in Tokyo December 18, 2014. (REUTERS photo/Toru Hanai/File Photo
The Paul Singer-led hedge fund-backed SoftBank’s purchase of a maximum of 7% of its shares for as much as 500 billion yen ($4.8 billion).
It is The key, they turned this year to $ 20 billion in stock repurchases through the sale of its stake in the Chinese e-commerce giant Alibaba (BABA).(N), and a nearly 25 percent drop in Japanese investment in the group’s shares at the end of March.
“SoftBank’s announcement that it intends to begin an initial purchase program of 500 billion yen, it is clearly an important first step in addressing the company’s substantial undervaluation, and that There is support,” She said in a brief statement on Friday.
The activist investor, who manage about $40 billion in assets, said SoftBank would be able to strive for more, for redemption following the completion of the merger, the unit Sprint (S. N) and T-Mobile (TMUS.D).
A SoftBank spokeswoman said that the company has made the decision to move to the buy-back of own shares, considering the risk of the volatility of the stock market, it would be able to raise the deep discount, which they turned into a stock relative to the value of the investments.
No new funding is planned for the acquisition, the spokesperson said.
“With SoftBank shares are trading up more than 50% lower than its fair value, buy-back of shares is not a good idea. It is not only a good price but a previous buyback helped make that company a discount for a meaningful small,” said Kirk Boodry, an analyst at Redex Holdings, which publishes the Smartkarma platform.
SoftBank shares fell as much by 9.6 per cent to a 14-month low on Friday amid a crash in global equity markets, but compared to the losses to close down 5 percent in Tokyo, japan.
The redemption will start on Monday and last year, the company said in a statement.
SoftBank said last month that it plans to lend up to 500 billion yen by 16 domestic and foreign financial institutions, and the use of a portion of its stake in the telecoms firm SoftBank Corp’s (9434.(T) as a pledge to boost its cash on hand.
A loan if the finances have been impacted by the losses on its $100 billion in the Vision Fund, and SoftBank will inject their own money into a follow-up of the fund, as a result of weak appetite from investors on the outside.
As one of the world’s most powerful activist investor, has amassed a holding of about $3 billion in SoftBank, and under pressure from the Japanese companies in a wide range of topics, including, the redemption and the improvement of transparency.
SoftBank founder and CEO Masayoshi Son, who has repeatedly said that SoftBank shares are chronically undervalued, it said last month during the opening of the potential to buy-back their shares, and that he was in no hurry to sell it down the Alibaba stake.
The procurement plan will be unveiled on Friday following a 600 billion yen to the buy-back of own shares, the largest ever, was announced a year ago. The funded programme using the proceeds of the bumper and the initial public OFFERING of SoftBank Corp. (a).
Reporting by Tim Kelly, Makiko Yamazaki and David Dolan; Additional reporting by Bharath Manjesh; Writing by Miyoung Kim; Editing by Edwina Gibbs, Muralikumar Anantharaman and Arun Koyyur