The founder of the Japanese corporation SoftBank Masayoshi Son, according to knowledgeable sources, has been leading the company to buy back shares for many years, but various factors regularly interfere with the implementation of this plan. The last attempt to make the company private was made in March, but the market situation did not contribute to its success.
At that time, as Bloomberg explains, SoftBank’s capitalization fell to $ 50 billion after a record drop in share prices, this once again inspired the head of the corporation to look for investors to buy back shares from the market. The logic that Masayoshi Son has followed for several years is quite simple: SoftBank’s assets in total are worth much more than the company itself. In March, the share price returned to growth, which made it difficult to find investors to buy out SoftBank’s assets – only shares owned by minority shareholders would have required about $ 100 billion.
SoftBank is already the second largest borrower for Japanese banks after Toyota Motor Corporation. The buyback of SoftBank shares would have required to attract about $ 80 billion; Japanese banks did not find it appropriate to finance the deal in the current situation. Investment company Elliott Management Corp. and the Mubadala Investment Co. from the UAE insisted on selling part of the Alibaba shares owned by the head of SoftBank, but he refused such conditions because he believes that he can earn much more on them in the future. It was assumed that Son will sell about a third of his shares in Alibaba, in total, the cost of his share in the capital of the Chinese giant is estimated at $ 40 billion.
Lower-ranking SoftBank executives are unanimously opposed to buybacks from the market, Bloomberg explains. In their opinion, this will not only require extracting huge funds from circulation, but will also limit SoftBank’s ability to conduct large transactions for the next year and a half. Moreover, the privatization of SoftBank will force the company to repay its debt obligations on foreign bonds ahead of schedule due to the change in ownership. There is even a conspiracy theory, supporters of which argue that every attempt by the head of SoftBank to prepare for a share buyback is thwarted by his associates, who “leaked” information to the press, automatically causing a rise in the value of the company’s assets and making it difficult to find sources of financing for the deal.
If you notice an error, select it with the mouse and press CTRL + ENTER.