SoftBank Group debates new strategies to go private via gradual buyout

Masayoshi Son wouldn't buy more shares himself, but his ownership stake, now about 27 per cent, would increase as other investors sell stock

SoftBank Group is debating a new strategy to go private by gradually buying back outstanding shares until founder Masayoshi Son has a big enough stake he can squeeze out the remaining investors, according to people familiar with the matter.

The approach would likely take more than a year and would mean the Japanese company continues to sell assets to fund successive buybacks, the people said, asking not to be identified because the plan is private. Son wouldn’t buy more shares himself, but his ownership stake, now about 27 per cent, would increase as other investors sell stock. Under Japanese regulations, Son could compel other shareholders to sell when he gets to 66% ownership, perhaps without paying a premium, the people said.

One advantage of the plan, which insiders have called a “slow-motion” or “slow-burn” buyout, is that it gives SoftBank flexibility to purchase its own stock when it dips, according to the people. In the case of a formal buyout, it would have to pay a premium, likely of around 25 per cent. Shareholders are also likely to support buybacks, especially since the company continues to trade at a discount to the total value of its holdings in companies from Alibaba Group Holding and Uber Technologies to DoorDash.

The billionaire said as recently as February he thought SoftBank was better off as a public company. More recently, he has declined to comment on his plans after reports about a possible buyout in publications, including Bloomberg News.

“If our shares drop down, I will buy back more shares more aggressively,” Son said at a conference in November. SoftBank declined to comment for this story.

Shares rose 5.6% on Wednesday in Tokyo after Bloomberg’s report, hitting a fresh 20-year high at 7,489 yen.