Rakuten backing off TBS bid

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TOKYO -- Internet shopping-site operator Rakuten Inc. is backing off its hostile takeover bid for Tokyo Broadcasting System after trying to increase its stake for more than two years.

Rakuten already owns close to 20% of the broadcaster's stock and its president, Hiroshi Mikitani, has stated previously that he would like to increase that stake and effectively turn it into an affiliate.

But the television company has thus far resisted the overtures, with 77% of shareholders voting in July for the adoption of a share-diluting "poison pill" designed to keep Rakuten at bay. That procedure was to be ratified at an extraordinary general meeting scheduled for October -- a meeting that may now be cancelled.

As TBS was looking for ways to defend itself, it also asked an advisory panel to draw up other options. The panel interviewed Rakuten's Mikitani, who assured them that he had no intention of increasing his stake in Japan's fifth-largest broadcaster beyond 21%.

While neither Rakuten not TBS will comment on the reports, the Internet company has attempted to alleviate investors' fears with a statement on its Web site.

"Rakuten fully understands and respects the importance of broadcast media and the Internet service industry in our society, and intends to further ensure and enrich the public nature of broadcasting through its relationship with TBS," the statement reads.

Rakuten is not the first Internet venture to try to seize a foothold in the broadcasting industry here. Both Fuji Television Network and TV Tokyo Corp. have been the target of hostile takeovers from cash-rich online outfits.
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