SoftBank Group Corp. surged to a 17-year high in Tokyo amid a rally in Japanese stocks and signs of progress in founder Masayoshi Son’s deal-making. The Tokyo-based company’s shares rose 3.6 percent 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 its peak in February 2000. A prolific dealmaker, 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 percent to 17 percent in Uber Technologies Inc., people familiar with the matter have said. SoftBank-controlled Sprint Corp. is also in the final stages of working out terms for a merger with T-Mobile US Inc., a deal that Son says will benefit competition in the U.S. wireless market. “It makes sense not to have just two with such big market-share and two little ones,” Son said in an interview for “The David Rubenstein Show: Peer-to-Peer Conversations” on Bloomberg Television. “Three is a real fight, a real competition.”
There remains an enormous gap between SoftBank’s market capitalization and the value of its equity holdings. Even with Thursday’s surge, the company’s market valuation is about 10.8 trillion yen ($96 billion), while its stakes in Sprint, Yahoo Japan Corp. and Alibaba Group Holding Ltd. are worth more than 19 trillion yen.
Even if Son is able to strike an agreement for the Sprint deal, he may face challenges in winning U.S. regulatory approval. Staff attorneys inside the Justice Department’s antitrust 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 President Donald Trump’s new antitrust chief, Makan Delrahim, to decide whether to fight the tie-up, or overrule them and approve it.
Son has stepped up his deal-making since unveiling plans for a $100 billion investment fund, with backing from Saudi Arabia, Apple Inc. and others. He’s put money into 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 percent 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.