Japan’s TBS, Rakuten delay talks

One sticking point is co.'s holdings of a 19.07% stake

TOKYO — The TBS web and online shopping giant Rakuten opted Thursday to put off tie-up talks for a month.

Delay is the seventh since the pair agreed to talks a year ago at the suggestion of the Mizuho Corporate Bank, setting the first deadline for the end of last March.

One sticking point is Rakuten’s holdings of a 19.07% stake in TBS, which the web insists that Rakuten sell before talks begin. Rakuten, however, is reluctant to give up what it sees as a strong bargaining chip.

Rakuten bought its TBS shares for ¥110 billion ($948 million). If it were to sell them now, it would take a loss of nearly $56 million — a move it could justify only if a merger with TBS were to yield more coin, which is by no means certain.

Since agreeing to discuss cooperation with Rakuten in the broadband business field, TBS has linked with other partners, including the Mitsui & Co. trading house, the Dentsu ad agency and electronics retailer Bic Camera to expand its Web-based activities.

As part of its agreement with TBS last November, Rakuten put nearly half its TBS shares in a trust account with Mizuho that’s due to expire in March. When the term is up, the possibility of talks may also evaporate.

Rakuten launched its merger campaign with TBS last year, ending in a stalemate and lingering acrimony between the two sides.

Since the beginning of the year, Rakuten’s own share price has plunged by two-thirds, weakening its clout in its battle of wills with TBS.