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Friday, March 17, 2006
Usen chief to buy Fuji's Livedoor stake
TV broadcaster faces 35 billion yen loss
Usen Corp. President Yasuhide Uno said Thursday he will personally purchase Fuji Television Network Inc.'s entire 12.75 percent stake in Livedoor Co. for 9.5 billion yen.
Usen, Japan's biggest cable broadcaster, and Internet and financial services firm Livedoor also announced a tieup in the Internet portal business.
"The (pairing of) the contents of (our free online video distribution service) GyaO and Livedoor's ability to attract customers will increase the value of (both companies) as media," Uno told a news conference in the evening.
With the purchase, Uno, 42, will become Livedoor's second-largest shareholder, after former Livedoor President Takafumi Horie, who holds a 17.25 percent stake. Horie has been charged with accounting fraud at the troubled Internet and financial services firm.
Uno said he decided to buy the shares, instead of limiting the relationship to the forging of business ties, to gain the trust of Livedoor employees.
But he also indicated that his shares will be transferred to Usen ownership once his company thoroughly investigates Livedoor's financial and legal situation.
Fuji TV sold its stake for 71 yen a share. The broadcaster, which bought the Livedoor shares for 44 billion yen as part of a deal last year between the two companies that ended a heated, two-month battle for control of Nippon Broadcasting System Inc., will incur an investment loss of roughly 34.5 billion yen to unload its Livedoor stock.
Fuji TV officials said they would book the amount as a special loss for fiscal 2005, which ends this month.
At the same news conference, Fuji TV Chairman Hisashi Hieda said the broadcaster plans to sue Livedoor for compensation for the loss.
He added that Fuji TV management need not take responsibility for the huge loss, stressing that the purchase of the Livedoor shares had gone through the proper channels, including gaining approval from the board.
Livedoor President Kozo Hiramatsu said in a separate news conference later in the day that his company will "carefully but sincerely" deal with Fuji TV's request.
Although Hiramatsu said Livedoor considered rebuilding its company on its own, it decided to seek outside support to speed up the process.
"For the sake of our customers, stakeholders and employees, it was important to get the company back on its feet as soon as possible," Hiramatsu said. "We thought it would take too much time if we did it on our own."
The purchase of Fuji TV's Livedoor shares by Uno is apparently intended to minimize the risks to Usen itself if the firm forms a capital tieup with Livedoor, sources said, noting that by forming the alliance with Livedoor, Usen aims to gain ground on Internet portal giants Yahoo Japan Corp. and Rakuten Inc. Usen offers its GyaO service to some 8 million subscribers.
Livedoor's stock price has been sliding since prosecutors raided the company in January. But on Thursday it rose for the third straight day, gaining 2 yen to end at 87 yen per share.
Founded in 1964, Usen is listed on Osaka Securities Exchange's Hercules market. Its consolidated pretax profit stood at 6.2 billion yen on sales of 154.1 billion yen in the business year that ended last August.
Information from Kyodo added