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    9984   JP3436100006

SOFTBANK GROUP CORP.

(9984)
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SoftBank : Commencement of Tender Offer by a Subsidiary (SoftBank Corp.) for Share Certificates, etc. of eMnet Japan co. ltd. (Securities Code 7036)

05/31/2021 | 03:32am EDT

May 21, 2021

SoftBank Group Corp.

Commencement of Tender Offer by a Subsidiary (SoftBank Corp.)

for Share Certificates, etc. of eMnet Japan co. ltd. (Securities Code: 7036)

SoftBank Group Corp. ("SBG") announced that on May 21, 2021 its subsidiary SoftBank Corp. (TSE First Section, Securities Code: 9434) has resolved to implement a tender offer (the "Tender Offer") for the common shares and the share options of eMnet Japan co. ltd. (TSE Mothers, Securities Code: 7036) pursuant to the Financial Instruments and Exchange Act (Act No. 25 of 1948; as amended), and to execute a capital and business alliance agreement with the company, as set out in the attached.

Outline of SoftBank Corp.

Address

1-7-1, Kaigan, Minato-ku, Tokyo

Name and title of the

Junichi Miyakawa

representative

President & CEO

Nature of business

Provision of mobile communications services, sale of mobile

devices, provision of fixed-line telecommunications, and ISP

services

Share capital

JPY 204,309 million (as of March 31, 2021)

May 21, 2021,

SoftBank Corp.

Notice Concerning the Commencement of Tender Offer for the Share Certificates, etc. of,

eMnet Japan co. ltd. (Securities Code: 7036) and Execution of a Capital and Business Alliance Agreement

SoftBank Corp. (hereinafter, the "Tender Offeror") announces that the Tender Offeror has decided to implement a tender offer (hereinafter, the "Tender Offer") for the common shares and the Share Options (defined in "(3) Tender Offer Price" in "2. Summary of the Purchase" below) of eMnet Japan co. ltd. (Securities Code: 7036) (hereinafter, the "Target Company," and the common shares of the Target Company shall be referred to as the "Target Company Shares" hereinafter) listed on the Mothers Market of the Tokyo Stock Exchange, Inc. (hereinafter, the "TSE") pursuant to the Financial Instruments and Exchange Act (Act No.25 of 1948, as amended; hereinafter, the "Act"), and that the Tender Offeror has further decided to execute a capital and business alliance agreement with the Target Company (hereinafter, the "Capital and Business Alliance Agreement" and, the capital and business alliance to be formed based on the Capital and Business Alliance Agreement shall be referred to as the "Capital and Business Alliance" hereinafter). Details are as follows.

1. Purpose of Purchase

  1. Summary of the Tender Offer

As of today, the Tender Offeror is a subsidiary of SoftBank Group Corp. (hereinafter, "SBG"), which owns 40.86% (the percentage of owned shares (rounded to the nearest hundredth (0.01) percentage point) relative to the total number of issued shares (excluding treasury stock) of the Tender Offeror as of March 31, 2021) of its issued shares (excluding treasury stock) through SoftBank Group Japan Corporation (hereinafter "SBGJ"), SBG's wholly-owned subsidiary. The Tender Offeror's shares are listed on the First Section of the TSE. As of today, the Tender Offeror, SBJ, and SBGJ do not own any of the Target Company Shares listed on the Mothers Market of the TSE and the Share Options.

The Tender Offeror has decided to execute the Capital and Business Alliance Agreement with the Target Company (for details on the Capital and Business Alliance Agreement, please refer to " The Capital and Business Alliance Agreement" in "(3) Matters Related to Important Agreements Concerning the Tender Offer" below.). In accordance with the Capital and Business Alliance Agreement, to implement the Tender Offer for the purpose of strengthening the business platform and driving sustained growth of both the Tender Offeror and the Target Company, and converting the Target Company into a consolidated subsidiary of the Tender Offeror through which the Tender Offeror will acquire a portion of the Target Company Shares (785,000 shares, ownership ratio: 39.74%) owned by EMNET Inc., the principal largest shareholder of the Target Company (number of shares owned: 1,180,200; ownership ratio (Note 1): 59.74%; hereinafter, "EMNET") and a portion of the Target Company Shares (6,200 shares, ownership ratio: 0.31%) owned by Shinichiro Yamamoto, CEO of the Target Company and its 6th largest shareholder (as of March 31, 2021) (name in family register: Shinichiro Annaka; number of shares owned: 60,000 shares; number of share options owned: 40 units (number of shares underlying the share options: 4,000 shares); ownership ratio 3.24%, hereinafter "Mr. Yamamoto"); EMNET and Mr. Yamamoto shall be collectively referred to as the "Tender-Agreed Shareholders" hereinafter). (All of the Target Company Shares to be acquired from the Tender-Agreed Shareholders (791,200 shares in total, ownership ratio: 40.05%) shall be referred to as the "Tender- Agreed Shares" hereinafter.)

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(Note 1) "ownership ratio" is the percentage (rounded to the nearest hundredth (0.01) percentage point) of shares owned relative to the number of shares (1,975,571 shares; hereinafter, the "Total Number of Target Company Shares After Adjustment for Diluted Shares") calculated as the sum of (i) the total number of shares issued by the Target Company (1,881,200 shares) as of May 12, 2021 as described in the "First Quarterly Report for the 9th Fiscal Year" submitted by the Target Company on May 12, 2021 (hereinafter, the "Target Company's First Quarterly Report"); (ii) the number of Target Company Shares (30,000 shares) issued upon the exercise of 75 units of the 1st Series Share Options from May 13, 2021 to May 21, 2021; and (iii) the number of Target Company Shares (total: 64,400 shares) underlying all of the Share Options outstanding as of May 21, 2021 (according to the Target Company, the 1st Series Share Options (93 units) (shares underlying the share options: 37,200); the 2nd Series Share Options (255 units) (shares underlying the share options: 25,500), and the 3rd Series Share Options (17 units) (shares underlying the share options: 1,700)), for a total number of shares (1,975,600 shares), and (iv) subtracting from this total number of shares (1,975,600 shares) the number of treasury shares (29 shares) owned by the Target Company as of March 31, 2021, as described in the Target Company's "Summary of Financial Results (Japanese GAAP) for the First Quarterly of the Fiscal Year Ending in December 31, 2021 (Non- Consolidated)" (hereinafter, the "Target Company's Summary of First Quarterly Financial Results) announced by the Target Company on May 11, 2021. The same applies to the calculation of the ownership ratio hereinafter.

Upon implementing the Tender Offer, the Tender Offeror executed a Tender Offer Agreement on May 21, 2021 with EMNET and a tender offer agreement with Mr. Yamamoto on the same date (hereinafter, referred to as the "Tender Agreements" together with the Tender Offer Agreement). Under the Tender Agreements, EMNET and Mr. Yamamoto has agreed with the Tender Offeror that EMNET will tender a portion of its Target Company Shares (785,000 shares, ownership ratio: 39.74%) to the Tender Offer and Mr. Yamamoto will tender a portion of his Target Company Shares (6,200 shares, ownership ratio: 0.31%) to the Tender Offer respectively. For details on the Tender Agreements, please refer to " The Tender Agreements" in "(3) Important Agreements Related to the Tender Offer" below.

The Tender Offer will be implemented based on the assumption that the Tender-Agreed Shares will be tendered. Moreover, the purchase price per Target Company Share in the Tender Offer (JPY2,257; hereinafter, the "Tender Offer Price") is set at a price discounted by 10.01% (rounded to the nearest hundredth (0.01) percentage point; the same shall apply to the calculation of the discount rate hereinafter) from the closing price of the Target Company Shares of JPY2,508 on the Mothers Market of the TSE on May 20, 2021, the business day before the announcement date of the Tender Offer. Therefore, it is assumed that only the Tender-Agreed Shares will be tendered. In addition, among the Share Options, it is stipulated that the exercise of share options for the 1st Series Share Options is conditional upon the holders of the share options having the position of a director, statutory auditor or an employee of the Target Company at the time of exercising the share options. It is further stipulated that the exercise of share options for the 2nd Series Share Options and 3rd Series Share Options is conditional upon the holders of the share options being a director (excluding directors who are audit and supervisory committee members) or an employee (provided, however, that this condition does not apply in the event that the holder of the share option has retired upon the expiration of his or her term of office or has retired upon reaching the retirement age, or where there are other causes) of the Target Company or the Target Company's affiliated companies at the time of exercising the

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share options. Given that those stipulations are interpreted to mean that the Tender Offeror would be unable to exercise the Share Options even if it were to acquire them through the Tender Offer, the purchase price per Share Option in the Tender Offer (hereinafter, the "Share Option Price") is set at JPY1. Therefore, the Share Options are not expected to be tendered. However, given that the Tender Offeror must acquire the Tender-Agreed Shares by way of a tender offer, the Tender Offeror will conduct the Tender Offer, and grant the same opportunity to shareholders of the Target Company other than the Tender-Agreed Shareholders and to the holders of the Share Options (hereinafter, the "Share Option Holders") to sell their shares.

Furthermore, the Tender Offer is intended as a means of acquiring the Tender-Agreed Shares, with the aim of converting the Target Company to a consolidated subsidiary of the Tender Offeror. It is not intended as a means of delisting the Target Company Shares. The policy of the Tender Offeror, EMNET and the Target Company is to maintain the listing of the Target Company Shares even after the Tender Offer is consummated. In this case, assuming the fulfillment of the continued listing criteria of the TSE's new market segments (for details, please refer to " Background and Purpose of the Tender Offer" in "(2) Background, Purpose, and Decision-Making Process of the Decision to Implement the Tender Offer, and the Management Policy after the Tender Offer" below), it is necessary to structure the transaction so that only the Tender-Agreed Shares are tendered to the extent possible. Additionally, considering EMNET's intention to maintain its ownership of around 20% of the Target Company Shares following the Tender Offer, and the intent of the Tender Offeror and EMNET for Mr. Yamamoto to not sell the Target Company Shares owned by Mr. Yamamoto in the Tender Offer to the extent possible, it is impossible for the Tender Offeror to acquire a majority of the Target Company Shares through the Tender Offer. For this reason, under the assumption that the Tender Offeror will make the Target Company a consolidated subsidiary based on International Financial Reporting Standards ("IFRS"), the accounting standards applied to the Tender Offeror, for the purpose acquiring the necessary number of Target Company Shares to achieve making the Target Company a consolidated subsidiary, the Tender Offeror has set the minimum number of shares to be purchased at 791,200 shares (ownership ratio: 40.05%, voting right ratio (Note 2): 41.40%), the same number of shares as the Tender- Agreed Shares. Therefore, if the total number of share certificates, etc. tendered in the Tender Offer (hereinafter, the "Tendered Share Certificates, etc.") falls below this minimum number of shares to be purchased, none of the Tendered Share Certificates, etc. will be purchased.

Moreover, as stated above, the Tender Offer is not intended as a means of delisting the Target Company Shares. The policy of the Tender Offeror, EMNET and the Target Company is to maintain the listing of the Target Company Shares even after the Tender Offer is consummated. However, the ownership ratio of share certificates, etc. of the Tender Offeror and its Special Related Parties (persons stipulated in Article 27-2, Paragraph 7 of the Act; as of today, EMNET is the only Special Related Party who owns the Target Company Share Certificates, etc. and is identified by the Tender Offeror; the same shall apply hereinafter) may exceed two-thirds following the Tender Offer (Note 3), giving rise in this case to a full purchase obligation and a full solicitation obligation in accordance with the provisions of laws and regulations (Article 27-13, Paragraph 4 of the Act, Article 14-2-2 of the Order for Enforcement of the Financial Instruments and Exchange Act (Government Ordinance No. 321 of 1965, as amended; hereinafter, the "Enforcement Order"), Article 27-2, Paragraph 5 of the Act, and Article 8, Paragraph 5, Item 3 of the Enforcement Order). Accordingly, no maximum number of shares to be purchased has been set. Therefore, if the total number of Tendered Share Certificates, etc. exceeds the minimum number of shares to be purchased (791,200 shares), the Tender Offeror will purchase all of the Tendered Share Certificates, etc.

(Note 2) "voting right ratio" is the percentage of voting rights relative to the 19,111 voting rights related to a number of shares (1,911,171 shares) calculated as the sum of (i) the total number of issued shares of the Target

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Company (1,881,200 shares) as of May 12, 2021 as described in the Target Company's First Quarterly Report and (ii) the number of Target Company Shares (30,000 shares) issued upon the exercise of 75 units of the 1st Series Share Options from May 13, 2021 to May 21, 2021; for a total number of shares (1,911,200 shares), and (iii) subtracting from this total number of shares (1,911,200 shares) the number of treasury shares (29 shares) owned by the Target Company as of March 31, 2021, as described in the Target Company's Summary of First Quarterly Financial Results.

(Note 3) Even if the same number of shares as the Tender-Agreed Shares is set as the maximum number of shares to be purchased in the Tender Offer (assuming in this case that the Share Certificates, etc. to be purchased consist of the Target Company Shares only), if Share Certificates, etc. other than the Tender-Agreed Shares are tendered to the Tender Offer, the total number of Tendered Shares, etc. would exceed the maximum number of shares to be purchased. For this reason, in this case, the purchase would be conducted on a pro rata basis pursuant to Article 27-13, Paragraph 5 of the Act, and Article 32 of the Cabinet Office Ordinance on Disclosure Required for Tender Offer for Share Certificates, etc. by Person Other Than Issuer (Ministry of Finance Japan Ordinance No. 38 of 1990, as amended) (hereinafter, the "Ordinance"). Depending on the number of Tendered Share Certificates, etc. (specifically, in the case where around 5% or more of the Total Number of Target Company Shares After Adjustment for Diluted Shares is tendered by the Target Company's shareholders other than the Tender-Agreed Shareholders), the number of Target Company Shares that will be owned by the Tender Offeror after the Tender Offer (791,200 shares; ownership ratio: 40.05%) will not vary with the number of Tendered Share Certificates, etc. (provided, however, that variations could likely arise as a result of conducting purchases on the pro rata basis described above). Meanwhile, if EMNET, which is a Tender-Agreed Shareholder and Special Related Party (number of shares owned: 1,180,200 shares; ownership ratio: 59.74%), is unable to sell a portion of the Target Company Shares it has agreed to tender to the Tender Offer (785,000 shares; ownership ratio: 39.74%), and since the number of Target Company Shares to be owned by EMNET following the Tender Offer increases more than initially expected, the Share Certificate, etc. Ownership Ratio after the Tender Offer of the Tender Offeror and its Special Related Party (for details on the calculation method, please refer to "(6) Changes in the Share Certificates, etc. Ownership Ratio after the Purchase" in "2. Summary of the Purchase" below) could exceed two-thirds as the result.

For this reason, depending on the result of the Tender Offer, the Target Company Shares may meet the delisting criteria for the Mothers Market of the TSE stipulated by the TSE (hereinafter, the "Delisting Criteria"). Should the Target Company Shares appear likely to meet the Delisting Criteria as a result of the Tender Offer, then as described below in "(6) Prospect of and Reasons for Delisting," the Tender Offeror and the Target Company plan to discuss and deliberate in good faith together on measures to avoid delisting within the one-year period set forth as the grace period until delisting, then execute the optimal measures for maintaining the listing of the Target Company Shares. However, the specific response of the abovementioned measures, the details of their implementation and conditions are not matters to be decided specifically at this time.

In order for the Tender Offeror to secure additional rights, such as the right to nominate a majority of the directors of the Target Company to obtain substantial control over management of the Target Company, after acquiring the number of Target Company Shares equivalent to the aforementioned minimum number of shares to be purchased, the Tender Offeror executed a Shareholders Agreement with EMNET on May 21, 2021 (hereinafter, the "Shareholders Agreement"; for details on the Shareholders Agreement, please refer to " The Shareholders

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Disclaimer

SoftBank Group Corporation published this content on 31 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 May 2021 07:31:01 UTC.


© Publicnow 2021
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