Softbank Corp, billionaire Masayoshi Son's investment company, will sell an 8.5 percent stake in Yahoo Japan Corp, raising about US$693 million to help fend off challenges to its high-speed Internet access business.
Son plans to use the funds from the stake sale to increase marketing of his company's Yahoo BB service, which is facing a growing threat from units of Nippon Telephone & Telegraph Corp, Japan's biggest telephone company.
Son slid from eighth to 386th on Forbes magazine's list of the world's richest people in three years and has been selling Internet investments to raise funds for Yahoo BB. The broadband network, which allows access to music and movies 100 times faster than dial-up services, has 2 million subscribers, one-third of the total, while two regional NTT units have about 2.2 million users.
"Softbank has been pushing the Yahoo BB business aggressively" to establish itself as the market leader, said Koichi Seki, an equity manager at Chuo Securities Co.
Softbank and one of its units will sell 40,000 shares of Yahoo Japan, a venture with US-based Internet directory Yahoo Inc, reducing Softbank's stake to 42 percent. At Friday's closing price, the stake would be worth ¥82 billion (US$693 million).
Softbank shares surged as much as 8.5 percent, while those of Yahoo Japan sank as much as 9.8 percent.
Softbank shares, which fell 97 percent in the past three years as Internet stocks plunged worldwide, closed trading at ¥1,730 at 3pm on the Tokyo Stock Exchange, arise of 10 percent. Yahoo Japan shares fell 10 percent to ¥1.84 million.
Softbank spokesman Katsumasa Tochihara said the company may also use the funds to repay more of its US$2.5 billion debt owed as of September. The company has been selling assets including some of its stake in Yahoo Inc., and is negotiating the sale of its 49 percent stake in Aozora Bank Ltd.
The number of Internet users in Japan for slower, dial-up Internet access services almost doubled in two years to about 20.8 million as the end of January, according to the Ministry of Public Management, Home Affairs, Posts and Telecommunications.
Over the same period, the number of Japan's high-speed Internet users rose from almost nothing to about 6 million.
The Nihon Keizai newspaper earlier reported that Softbank is reducing its stake partly to qualify Yahoo Japan for a listing on the first section of the exchange, which will allow more investors to buy its stock.
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