Broadcaster forks over $97 million to Rakuten
Broadcaster Tokyo Broadcasting System made a $97 million advance payment to buy back its shares from online retailer Rakuten on Thursday.
The two companies have been at loggerheads since Rakuten scooped a 15.46% stake in TBS in October 2005, which TBS regarded as the start of a hostile takeover bid.
Rakuten later upped its stake to 19% and demanded that the network start partnership talks, while TBS engaged in a series of counter maneuvers to weaken Rakuten’s clout.
Last March a frustrated Rakuten asked TBS to buy back its shares, amounting then to a 19.83% stake.
In July TBS finally made an advance payment of $440 million to Rakuten in a share buy back.
Earlier this month the Tokyo District Court set a price of $14.22 per share, the closing price on TBS stock the day Rakuten made its buy-back request.
The latest payment makes up for the shortfall in the total amount due to Rakuten according to the court’s decision.
Rakuten paid an average of $32.96 per share in buying its stake, meaning that it could take a loss of $66 million from the buy back. The company is appealing the court ruling and a final resolution remains.
TBS made the advance payment to lower its interest costs on funds borrowed from shareholders.