Rakuten Looking To Raise $1.5B To Fund Growth

Japan’s biggest e-commerce player, Rakuten Inc., has plans to raise $1.5 billion via a share offering.  The firm is looking to strengthen its financial position as it moves to expand through acquisitions.

The new share offering will release 100 million tiny pieces of Rakuten up for purchase on the market of international and domestic investors.  The price on those shares is at this point still not known, but the plan for the proceeds is – at least partially.

The first purpose of the money is to pay down debt – much of it recently gained as the firm seeks to consolidate its position as a global digital player. Recent acquisitions include $905 million for Israeli instant messaging-service operator Viber, around $1 billion for U.S. rebate-site operator Ebates Inc. and a forthcoming purchase of ebook maker OverDrive Inc. for about $410 million.

“The Company believes that a strong financial standing is needed for Rakuten Group’s sustainable future growth in the rapidly changing Internet services industry,” it noted in a statement.

The forthcoming share sale has some precedent within the firm – most recently in 2006 when it procured around $17 billion (¥110 billion). It also increased its capital by around $4.84 billion (¥30 billion) in 2004, $7.74 billion (¥48 billion) in 2003 and  $7.9 billion (¥49 billion) in 2000.

Rakuten’s acquisitive ambitions are not exactly unique in its East Asian milieu.  Japanese telecommunications and Internet giant SoftBank Corp announced a $1 billion stake in South Korea’s largest mobile commerce company Coupang earlier this week.  That might add up to being the largest Internet investment in South Korea’s history. Alibaba Group Holding Ltd. is poised to make public a $200 million deal for a 30 percent stake in China Business News, a financial TV and newspaper company, according to people familiar with the matter.