If it goes ahead, this listing could be one of Japan’s biggest initial public offerings.
Japanese behemoth SoftBank is in talks over a spin-off listing of its domestic telecoms business, SoftBank Corp, according to multiple reports.
The Nikkei Asian Review reported the listing on the Tokyo Stock Exchange and is hoping for an overseas debut, possibly in London. It could potentially raise $18bn (2trn yen).
A company response
In a statement, the company did confirm the listing of SoftBank Corp shares as one of many capital strategy options it is currently exploring, but said no official decision has been reached.
The Financial Times reported that the billionaire founder of SoftBank, Masayoshi Son, wants to boost the company’s investment clout.
It also said that a primary reason for the acceleration of IPO discussions was a desire for the company to get in front of Toshiba’s forthcoming memory chip unit IPO.
Proceeds to boost growth
Nikkei said that the company would be using the proceeds to invest in growth, possibly buying into foreign IT firms.
The company has interest-bearing debt of approximately 14trn yen as of last September, but the group is not planning to use the IPO proceeds to pay down debt.
Erik Gordon, a professor at the Ross School of Business in the University of Michigan, told Reuters that it is a savvy decision to spin off the mobile business, as it would “leave SoftBank in control and provide SoftBank with more cash to pursue its strategy of investing in companies with potentially high-growth prospects”.
The Japanese company has a myriad of holdings, including stakes in Sprint and ARM, and also set up the multibillion-dollar Vision Fund with other investors to capitalise on new technological developments such as robotics, IoT devices and data analytics.
The news of the potential IPO comes as SoftBank invests €460m into used car marketplace Auto1, valuing the start-up at €2.9bn.
Auto1 is a platform that connects car buyers and sellers in around 30 countries, and the investment by the Japanese firm is part of the Vision Fund. Apple and the Saudi Arabian sovereign wealth fund are among the other backers.