The largest Internet portal in Japan – Yahoo Japan Corp. revealed that it has dropped its intentions to purchase eAccess from SoftBank Corp. in a deal estimated to 324 billion yen (3.2 billion dollars) in an attempt to expand its reach in wireless data and voice sectors.
According to the information disclosed in Yahoo Japans statement, which was cited by the Financial Times, “Yahoo Japan Corporation came to the conclusion that rather than converting eAccess to a consolidated subsidiary and building an infrastructure on its own, it would be better to develop the business by employing the strengths of each company.”
The company has cancelled its bid for the acquisition of SoftBanks eAccess, explaining that it faced its investors scepticism. According to the two companies, Yahoo Japan Corp. would prefer to focus on services, while SoftBank and its telecom unit would concentrate on infrastructure. Yahoo Japan also revealed that it still intends to release a new service, which is called “Y!Mobile” in an attempt to attract new subscribers to its mobile network.
Yahoo Japan Corp. revealed that instead of carrying on with the purchase of eAccess from SoftBank, it intends to proceed with the plans for development of its operating partnership with a carrier that would help it stay focused on its traditional services.
According to a statement made by SoftBank, the cancellation of the acquisition would have almost no impact. The news comes at a moment when Alibaba Group Holding Inc. has just announced that it considers going public. The latter will also provide SoftBank, which holds a 34.4% stake in Alibaba, with access to a number of financial deals.
Amir Anvarzadeh, who works at BGC Partners Inc. commented on the companys decision in an e-mailed statement, which was cited by Bloomberg: “It looks like Yahoo Japan is finally standing up to its top shareholder and has refused to take on the minority stake in eAccess from SoftBank.”
Yahoo Japan Corp. was 2.84% down to close at 411.00 Japanese yen per share in Tokyo, marking a one-year change of -19.57%. According to the information published on the Financial Times, the 17 analysts offering 12-month price targets for Yahoo Japan Corp. have a median target of 580.00, with a high estimate of 730.00 and a low estimate of 400.00. The median estimate represents a 37.12% increase from the last price of 423.00.
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