Japanese telco Softbank plans to launch a tender offer to increase its stake in video game corporation GungHo Online Entertainment for up to Y25bn (US$264m).
In an announcement to the Tokyo Stock Exchange today, the telco said that its subsidiary…
Japanese telco Softbank plans to launch a tender offer to increase its stake in video game corporation GungHo Online Entertainment for up to Y25bn (US$264m).
In an announcement to the Tokyo Stock Exchange today, the telco said that its subsidiary Softbank Mobile had offered to buy 73,400 shares, representing 6.37% of GungHo, from stakeholder Asian Groove for Y340,276 (US$3,592) per share.
The acquisition will help Softbank expand its position in the online and smartphone game market, said the statement.
Softbank currently owns a 33.63% stake in the video game company and its CEO Masayoshi Son owns 18.5% separately. Softbank plans to merge these shares and combine them with those acquired from Asian Groove, giving the telco a controlling stake in GungHo.
Although GungHo will become a subsidiary of Softbank if the tender is successful, the management and its independence as a games developer will be maintained following the acquisition.
Softbank expects increased income of Y170bn (US$1.8bn) in its Q1 2014 results due to the stake hike.
The tender offer commences on 1 April, with Mizuho Securities acting as agent for the process.
Anderson Mori & Tomotsune is legal advisor to GungHo.
“[Softbank] recognized the importance of enhancing mobile content by combining smartphone-focused development capability and infrastructure held by the Softbank Mobile Group and planning and creating capability in the smartphone game industry held by [GungHo] to further improve the efficiency in operation of the mobile communications business, profitability and competitiveness,” said the statement from the telco giant.
“It is also expected that enhancing the capital relationship with [GungHo] and utilizing the global management resources held by the Softbank Group will contribute to the revenue and the expansion of distribution channels of online and smartphone games, and allow [GungHo], [Softbank Mobile] and the SoftBank Group to enhance their revenue base and enterprise value.”
