SoftBank gets go-ahead for $21B telecom IPO

Japan's SoftBank said it had received the necessary approvals for a listing of its telecom business worth 2.4 trillion Japanese yen (US$21 billion) on the Tokyo Stock Exchange in a move that will raise additional funds for its technology investments.

The initial public offering (IPO) would be one of the largest of all time and represent a formal split between the telecom arm of SoftBank Corp. and its investment activities, which are channeling funds into a range of technology companies.

The company is selling 1.6 billion shares for a likely price of JPY1,500 each ($13.17) and will retain about two thirds of the listed unit, which will carry a market value of about JPY7.18 trillion ($63 billion).

The news comes several months after reports first surfaced that SoftBank was exploring a potential listing. (See SoftBank Eyes $30B IPO – Report.)

The company competes against NTT DoCoMo Inc. (NYSE: DCM) and KDDI Corp. in the Japanese telecom market but has become increasingly focused on its investment activities under founder and CEO Masayoshi Son. Last year, it launched a $100 billion investment vehicle called the SoftBank Vision Fund, which has secured the backing of some of the world's biggest technology companies as well as sovereign wealth funds in the Middle East.

In a statement published on its website, SoftBank described today's move as an important step in its transformation from telecom operator into a major investment company and said it would provide greater clarity for the market.

Now entering its fifth year, the 2020 Vision Executive Summit is an exclusive meeting of global CSP executives focused on navigating the disruptive forces at work in telecom today. Join us in Lisbon on December 4-6 to meet with fellow experts as we define the future of next-gen communications and how to make it profitable.

"Through the listing of SB [SoftBank, the telecom unit] shares, SBG [SoftBank Group] expects that the respective roles and valuations of the two companies will be clear," it said. "SBG is accelerating investments on a global scale, while SB is a core company to the Group's telecommunications business."

"It is hoped that each of the two companies will be able to provide information regarding their businesses to the market with greater clarity and thereby better respond to the various needs of investors," it added.

A final decision on the share price will be taken on December 10. If demand for shares looks strong, SoftBank will also have the option of selling up to 160 million additional shares worth more than JPY240 billion ($2.1 billion).

Shares are due to begin trading in Toyo on December 19.

— Iain Morris, International Editor, Light Reading