Livedoor offers to help resist Rakuten's takeover bid
HONG KONG –Japanese internet entrepreneur Takafumi Horie is back in the thick of a takeover battle only two months after his audacious attempt to take over Fuji TV.
Horie’s Livedoor is offering to act as “white knight” in the stock market battle involving Internet shopping empire Rakuten, which is bidding to take over Japan’s third largest net, Tokyo Broadcasting System. Rakuten secretly built up a 15.5 percent share stake in TBS and last week sent it a 115-page document proposing a merger through a joint venture company.
Livedoor is now acting more friendly to TBS and has held talks offering to help the net resist Rakuten’s advance. As a measure of how much Livedoor has changed tactics, this time it says it won’t buy any shares without TBS’s prior agreement.
TBS has sent Rakuten a list of questions in an attempt to determine whether the approach is about to become hostile. Rakuten says it is encouraged that this suggests TBS is taking its offer seriously, but according to press reports TBS has been disappointed by the responses it has had so far.
Hostile corporate takeovers are rare in Japanese business and Livedoor’s move to control Fuji TV through control of Nippon Broadcasting System, its biggest shareholder at the time, caused many companies to erect defensive walls and prepare “poison pills.”
There may be another stumbling block preventing Rakuten and TBS getting hitched. Both companies have significant interests in baseball teams — Rakuten owns the Golden Eagles, while TBS controls the Yokohama Bay Stars — a conflict of interest which may mean dropping one team or dropping the bid approach.
Livedoor’s bid for NBS failed when media investor Softbank came in as a white knight. But Fuji still ended up having to buy back Livedoor’s holding for $956 million and take a $410 million 15% stake in Livedoor.
The scale of the TBS skirmish is smaller that the NBS-Livedoor fight, but the latest maneuverings suggest that Japanese dotcoms have lost none of their appetite for content. Nor their willingness to throw out the politesse of Japan’s corporate rulebook.