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Friday, March 25, 2005

Things Are Getting Interesting In the Fuji Takeover Battle

In grad school, I was attracted to corporate finance because of the themes involved - agency problems, incentives, the maneuvering in corporate control battles, etc...

I also got a big kick out of the terminology of corporate control: spinoffs, carveouts, white knights, greenmail, and so on.

The takeovoer battle for Fuji is a good example. As reported in an article in today's New York Times, it seems that Softbank may be playing the role of "white knight" for Fuji, and has bought up a significant stake in the company:

TOKYO, March 24 - An affiliate of Softbank of Japan emerged as the biggest shareholder in the Fuji Television Network on Thursday in a move apparently intended to fend off a possible takeover of Fuji by Livedoor, the Internet start-up.

The Softbank Investment Corporation acquired 14.67 percent of the voting rights in Fuji Television, Japan's largest private television network, by borrowing the shares from the Nippon Broadcasting System, a Fuji affiliate, the companies said in a statement Thursday.

However, Softbank's motives are interesting.

The Softbank group has good reason to help Fuji defend itself from a hostile takeover by Livedoor: Softbank is the largest shareholder in Yahoo Japan, one of Livedoor's top rivals. Softbank also runs the country's second-largest broadband Internet service, after NTT, and has holdings in a host of Internet businesses. Softbank owns 39 percent of Softbank Investments.
Click here for the whole article

Japan may be undergoing some of the same changes that Europe saw in past years. Hostile takeovers are extremely rare. According to the article, "public disputes are considered distasteful". Horie (who runs the hostile suitor Livedoor) is a college dropout, so there also seems to be some cultural/class ramifications to the maneuvering.

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