Listen to this article
This is an experimental feature. Give us your feedback. Thank you for your feedback.
What do you think?
Rakuten, the Japanese internet group making an unsolicited bid for TBS, on Wednesday highlighted the prospects for strong growth in its online businesses as it reported a better than expected performance in the third quarter.
Rakuten, which operates Japan’s largest online shopping mall, said sales and profits rose strongly in the three months to September, helped by stronger demand for its electronic commerce services and a booming stock market.
The firm results will help to allay concerns that Rakuten, which is proposing a merger with TBS, is over-reaching itself in its attempts to gain control of the Japanese TV broadcaster.
Rakuten spent Y111bn (US$948m) last month on a 19 per cent stake in TBS, emerging as its largest shareholder. It has used its stake to put pressure on the TV broadcaster to consider a merger to create what Rakuten says would be a global media group.
TBS has countered that Rakuten, which has grown rapidly through acquisitions, wants to harness the broadcaster’s cashflow to help ensure it maintains its market capitalisation.
Hiroshi Mikitani, Rakuten president, said the acquisition of TBS shares would not negatively affect the online retailer’s own operations.
“We believe [our debt] is within a level that is not a problem at all,” he said. “I don’t think this deal is having any negative impact at all on our image.”
Mr Mikitani brushed aside concerns that the acquisition of TBS shares had put a financial strain on the group. He said that the dividends from the stake were larger than the interest Rakuten paid on the debt it incurred to acquire the shares.
However, Mr Mikitani declined to confirm reports Rakuten had to scale back plans to issue new shares to finance further purchases of TBS shares. “The [third-quarter] results were much better than we ourselves expected,” he said.
Sales quadrupled to Y45.2bn and pre-tax profits also nearly quadrupled to Y13.2bn. Net profit was Y6bn, compared with a loss of Y7.72bn previously. Strong demand for its online shopping services and Japan’s booming stock market were the main contri-butors.