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09.12.2020

SoftBank considers going private, again

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Debates around a buyout intensified amid chronically undervalued company’s stocks

Stocks impacted: SoftBank Group Corp. (9984)

According to the latest reports, SoftBank is discussing a strategy to go private by gradually buying back outstanding shares until founder Masayoshi Son has a big enough stake he can squeeze out the remaining investors. to do this, Son, who owns a quarter of SoftBank's shares, would need to lift his shareholding ratio to two thirds. Debates around a buyout intensified amid chronically undervalued company’s stocks despite the price has recovered from March lows by 180% due to asset sales and record share buybacks. As a reminder, the company spent $1.6 billion on buybacks in November, an increase from the previous month. Son has debated the idea of going private off and on for at least five years already. The company has already announced plans to buy back 1.5 trillion yen more through July of next year. Following the report that the group is again considering going private, SoftBank stocks rallied around 7% in a knee-jerk reaction and closed in Tokyo 5.57% higher on Wednesday.

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