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Vodafone on Friday agreed to a ¥1,800bn (£8.9bn) sale of its Japanese mobile telecoms business to internet conglomerate Softbank, after it snubbed a potential rival bid from a financial group.
Softbank, the Japanese group founded by Masayoshi Son, will take over 97.68 per cent of Vodafone KK, as it enters the mobile telecommunications sector for the first time since receiving a license last year. It will be borrowing up to ¥1,200bn from banks to finance the deal.
It has beaten Cerberus, the US hedge fund which made an all-cash offer to Vodafone on Thursday with its partner Providence Equity Partners. The Cerberus interest was believed to have accelerated Vodafone’s talks with Softbank, which had been expected to extend into April.
Vodafone said on Friday that it had considered other offers but was satisfied with the value offered by Softbank. It would invest ¥400bn back into the business through the purchase of ¥300bn in preferred shares and lending Softbank ¥100bn. Softbank will put up ¥200bn in cash while its affiliate, Yahoo Japan, is also buying ¥120bn worth of preferred shares in the business.
Vodafone said on Friday that it would return £6bn ($10.5bn) to shareholders on completion of the sale, which should take 1-2 months.
Mr Sarin has been under pressure from shareholders to sell Vodafone’s operation in Japan and concentrate on improving Vodafone’s performance in the increasingly competitive European market. Analysts also expect him to use the proceeds from the sale to repay debt.
The Vodafone brand will no longer be marketed in Japan following the sale but the UK operator is considering a joint venture in mobile platforms and content with Softbank.
Additional reporting by Andrew Edgecliffe-Johnson and Peter Smith in London