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Friday, May 18, 2007
Rakuten refuses to limit TBS stake goal to 20%
Rakuten Inc. President Hiroshi Mikitani said Thursday that he won't limit his acquisition goal for shares of Tokyo Broadcasting System Inc. to 20 percent.
"I have no plans, but the possibility (of buying more shares in the future) is not zero," Mikitani told a news conference.
Mikitani said he intends to raise Rakuten's stake to above 20 percent from 19.86 percent at present to make the broadcaster an equity-valued affiliate of Rakuten, meaning TBS' earnings would be incorporated into Rakuten's income in proportion to the size of its equity investment.
TBS suspects Rakuten is aiming for a higher stake so it can take over the broadcaster.
Rakuten announced April 19 that it would raise its stake in TBS to "a little more than" 20 percent and asked TBS to make Mikitani and Muneaki Masuda, president of Culture Convenience Club Co., outside members of the TBS board.
TBS rebuffed Rakuten's merger proposal in October 2005, but continued to hold talks with the Internet mall operator on what it called a fusion of broadcasting and Internet services. The talks stalled for more than 17 months before Rakuten broke the stalemate by bluntly announcing its 20 percent acquisition goal in April.
At the same news conference, Rakuten Vice President Atsushi Kunishige said the company has begun contacting TBS shareholders to see if it can persuade them to agree to its proposal.
Rakuten is also fighting a TBS measure that would make it harder for hostile takeovers to succeed.
"We are explaining our position to the shareholders," Kunishige said. "It's tough because there are many shareholders."
Kunishige's remark indicates that Rakuten is in a proxy fight with TBS as the broadcaster's June 28 general shareholders' meeting approaches.
Meanwhile, Rakuten said group net profit dropped 41.1 percent to 2.2 billion yen in the January-March quarter as sales fell 7.2 percent to 48.4 billion yen due to declining profits from its brokerage and credit card divisions.