It was unexpected that the deposit was as low as ¥500 million, but otherwise things have generally unfolded according to the scenario. What puzzles me is that the following obvious strategy has not been mentioned by any media outlet. (I have been saying this for some time, too….) Namely:
“Nippon Broadcasting launches a hostile takeover of Livedoor.” (The Pac-Man defense)
The funds could come from a third-party allotment to Fuji Television, or from the proceeds of selling Fuji Television shares and Pony Canyon shares. In the latter case, there is no need to sell all of them; for the time being, it would only need to sell enough to acquire 25% of Livedoor. In short, it is the exact opposite of what Livedoor says it will do to Fuji.
Why has the media not discussed this? I assume there must be some reason it cannot be done, but could someone explain it?
Update: (3/15 6:13am)I see: the company that bought the shares was Livedoor Partners, an unlisted company, so its shares cannot be bought. That makes sense.
Market capitalization at the 6/12 close
Fuji Television 596,374 millions of yen
Nippon Broadcasting 234,520 millions of yen
Livedoor 226,224 millions of yen
Nippon Broadcasting’s holdings of Fuji Television shares = 134,184 millions of yen (22.5%)
Livedoor’s acquisition of Nippon Broadcasting shares this time = approximately 85,000 millions of yen (42.23%)
Nippon Broadcasting operating profit: 4,614 millions of yen
Pony Canyon operating profit: 3,612 millions of yen
Fuji Television operating profit: 44,065 millions of yen
Hmm, Nippon Broadcasting is basically Pony Canyon, then.
If it sold Pony Canyon to Fuji at a fair price, an enormous amount of cash would remain in Nippon Broadcasting, so they probably would not do that. The likely strategy would be simply to issue new shares with Fuji as the subscriber, simultaneously making Nippon Broadcasting a Fuji subsidiary and diluting Livedoor’s stake in Nippon Broadcasting. Incidentally, PC has 4 shareholders from the Fujisankei Group. Its capital is approximately ¥1.2 billion. The largest shareholder is Nippon Broadcasting with a 56% stake; Fuji ranks 2nd with 27%; Sankei Shimbun ranks 3rd with 16%; and Fuji subsidiaries own the remainder. With a simple capital increase, LD is not a direct shareholder, so it would probably be difficult for it to object.
In terms of share ratios, 134,184 millions of yen * 0.4223 = 56,666 millions of yen, so if LD wanted Fuji shares, it should have been cheaper to buy them directly.
Looking at profits, Nippon Broadcasting’s share of Fuji Television’s operating profit is 44,065 * 0.225 = 12,750 millions of yen. If 42.23% of that belongs to LD, that is 5,384 millions. There must be considerable overlap, but adding Nippon Broadcasting’s share gives 7,332 millions, perhaps. And it bought this for 850,000 millions.
I cannot really tell whether that was a good or bad deal.
Related articles:
http://www.tez.com/blog/archives/000385.html
http://cozymax.peko.tv/blog/news/horiemon050308.html