x Abu Dhabi, UAEThursday 19 October 2017

SoftBank shares soar to 17-year high amid founder's resurgent deal making

Tokyo-based company’s stock ends at highest closing price since March 2000 in the midst of the dot-com boom

Masayoshi Son, the chairman and chief executive officer of SoftBank: Mark Kauzlarich/Bloomberg
Masayoshi Son, the chairman and chief executive officer of SoftBank: Mark Kauzlarich/Bloomberg

SoftBank surged to a 17-year high in Tokyo amid a rally in Japanese stocks and signs of progress in the founder Masayoshi Son’s deal-making.

The Tokyo-based company’s shares rose 3.6 per cent to ¥9,840 in Tokyo, the highest closing price since March 2000 in the midst of the dot-com boom. The stock remains less than half it speak in February 2000.

A prolific deal maker, Mr Son is in the midst of several high- profile negotiations. SoftBank is part of a group of investors in talks for a stake of 14 per cent to 17 per cent in Uber, people familiar with the matter have said.

SoftBank-controlled Sprint is also in the final stages of working out terms for a merger with T-Mobile US, a deal that Mr Son says will benefit competition in the US wireless market.

“It makes sense not to have just two with such big market- share and two little ones,” Mr Son said. “Three is a real fight, a real competition.”

There remains an enormous gap between SoftBank’s market capitalisation and the value of its equity holdings. Even with Thursday’s surge, the company’s market valuation is about ¥10.8 trillion (Dh352.65 billion), while its stakes in Sprint, Yahoo Japan and Alibaba Group are worth more than ¥19tn.

Last month, The National reported that Saudi Arabia’s Public Investment Fund (PIF), the kingdom's sovereign wealth fund, and SoftBank would create a robotics initiative to pave the way for technology to be integrated across industries and the public sector.

PIF and SoftBank are working to partner with governments, private companies and academia to create a platform to drive the robot industry while establishing a set of standards which currently do not exist, according to the Saudi Press Agency.

“The real world applications of robotics industry are rapidly moving from theory to reality, and this shift is creating a pressing need to improve, future-proof and standardise areas relating to regulation and measurement,” Mr Son said at the time.

The collaboration widens PIF's previous partnership where it came on board to invest in SoftBank’s global tech investment fund, that was created last year to support companies and entrepreneurs. Other investors include Abu Dhabi’s Mubadala, which has said it would commit US$15 billion to the SoftBank Vision Fund, as well as Apple, Foxconn and Qualcomm.

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Even if Mr Son is able to strike an agreement for the Sprint deal, he may face challenges in winning US regulatory approval. Staff attorneys inside the US justice department’s anti-trust division are likely to view any plans to merge the two companies as a threat to competition, people familiar with the staff’s thinking have said. If they recommend to sue to block the deal, that would leave it to the US president Donald Trump’s new anti-trust chief, Makan Delrahim, to decide whether to fight the tie-up, or overrule them and approve it.

Mr Son has stepped up his deal-making since unveiling plans for a US$100bn investment fund, with backing from Saudi Arabia, Apple and others. He is put money in to robots, artificial intelligence, microchips and satellites, sketching a vision of the future where a trillion devices are connected to the internet and technology is integrated into humans.

SoftBank shares have climbed 27 per cent this year, boosted by Alibaba doubling its stock price over the same period. The stock has also benefited from a surge in Japanese equities, with the Nikkei 225 Stock Average hitting its highest level since 1996.