SoftBank Group has been spending time in talks with investment firms Elliott Management and Mubadala over the possibility of taking its Japanese tech conglomerate private, the Financial Times (FT) reported, but the strategy has ultimately been scrapped.
After a stock market slump as of late due to the coronavirus pandemic, SoftBank founder Masayoshi Son has been trying to boost shares in the company again. Taking the firm private shows that he is ready to employ extreme measures to save the company, although the move isn’t necessarily a sure thing.
The idea of going private was born out of recent discussions with Gordon Singer, who runs the London office for Elliott, the FT report noted. Singer said he might be interested in buying more of SoftBank’s shares as the prices were falling. FT sources said those talks spurred Son toward the possibility of taking the company private, and he began looking at forming an investor consortium to do so.
That plan was eventually nixed. FT sources said the process of forming a consortium was too time consuming, and for such a large deal, things like tax considerations made it too complex.
Instead, the plan changed to selling down 4.5 trillion yen ($40.6 billion) in assets, going toward paying debt. This boosted a share buyback to 2.5 billion yen ($22.5 billion), which helped spark a revival of the four-year low the firm’s shares had been sitting at. Now, the shares sit at 3,791 yen ($34.16), a 41 percent increase from last week.
Son has been known as a risk taker and has previously been known for expressing resentment toward the public market. He has said the firm’s equity value is at a steep discount with the value of its holdings.
SoftBank has recently been involved in controversy over its involvement in the bailout deal with WeWork, in which the conglomerate was reportedly considering backing out. In addition, SoftBank has been trying to raise money for its Vision Fund in an attempt to help companies burdened by the coronavirus pandemic.