SoftBank’s attempt to privatize fails to negotiate with investors

Japan’s SoftBank Group is in talks with investors such as hedge fund Elliott Management and Abu Dhabi’s sovereign investment fund Mubadala, according to three people familiar with the matter, according to three people familiar with the matter.

SoftBank's attempt to privatize fails to negotiate with investors

The talks came as SoftBank founder Sun Justice’s plan to sell assets worth about Y4, 500bn ($41bn) to pay down debt and raise the size of share buybacks to Y2,500bn ($23bn) helped help SoftBank’s share price rebound sharply.

But potential privatisation talks suggest that Mr Sun is considering all possible options to deal with the turmoil in SoftBank’s share price and global stock markets. Over the weekend, SoftBank’s shares had an equity value of about $50 bn before any potential premium was applied. SoftBank, Elliott and Mubadala declined to comment.

Sun, who already owns a quarter of SoftBank, is considering a leveraged takeover after Gordon Singer, head of Elliott’s London office, said last week that he was interested in buying more SoftBank shares, according to people familiar with the matter. In the course of these discussions, Sun began to study seriously the formation of an investor consortium to privatize SoftBank.

Many of Sun’s key deputies also participated in the discussions, including Yoshimitsu Goto, SoftBank’s chief financial officer, Rajeev Misra, a former Deutsche Bank trader who was in charge of SoftBank’s Vision Fund, and Marcelo Crower, the company’s chief operating officer. Marcelo Claure).

Several people familiar with the matter said the plan was eventually abandoned for a number of reasons, including the complexity of quickly forming a consortium of investors to conduct such a large-scale deal, Tokyo listing rules and other tax considerations. Mr Sun argues that softbank’s stake is grossly undervalued, well below the value of its stake in other companies, including about $130bn in Alibaba.