"Line Yahoo Stake Negotiations Keep Various Possibilities Open"
"A Holdings Already Controlled by SoftBank"
SoftBank officially announced on the 9th that it is discussing a plan to purchase shares from Naver regarding the 'reexamination of capital relations' of its subsidiary Line Yahoo. However, it stated that negotiations may take a long time and discussions have not yet reached an agreement.
SoftBank CEO Junichi Miyakawa said during the earnings conference call held that afternoon, "Line Yahoo announced yesterday that it will sequentially terminate its business consignment relationship with Naver," adding, "We are discussing a capital reexamination at the request of Line Yahoo from the perspectives of security governance and business strategy."
However, he added, "At this point, both sides have not reached an agreement, and we will promptly disclose any developments in the future."
This disclosure by SoftBank about the capital relationship reexamination negotiations follows Line Yahoo CEO Takeshi Idezawa's statement the previous day that "discussions on changing the capital relationship are underway in a way that SoftBank will hold the largest share."
Earlier, Japan's Ministry of Internal Affairs and Communications issued administrative guidance to Line Yahoo in March this year, demanding management system improvements through a 'reexamination of capital relations' related to the personal information leak incident involving Line that occurred in November last year. The deadline for responding to the administrative action is July 1.
However, CEO Junichi explained, "Intuitively, it will be very difficult to complete negotiations by the July 1 deadline for the administrative action response," indicating that discussions are expected to continue.
Currently, SoftBank and Naver each hold half of the shares of 'A Holdings,' the largest shareholder of Line Yahoo. CEO Miyakawa said, "How to adjust the share ratio has not been decided yet, but we are discussing SoftBank holding more than half," adding, "We are considering purchasing anywhere from 1% to 100% from Naver."
He added, "Since conditions may vary depending on how much stock is purchased, the scale will be determined on the premise that there is no impact on SoftBank's business or cash flow."
It is expected that fierce negotiations will unfold between the two sides over the conditions and extent to which Naver will transfer shares.
Additionally, there are opinions that even if Naver transfers shares, it will be difficult for Line Yahoo to become technically independent. Ichiro Sato, a digital policy expert and professor at the National Institute of Informatics in Japan, told the Asahi Shimbun, "Line Yahoo has promoted technological innovation, but it cannot close the gap with Naver's technological capabilities in one or two years," and analyzed, "Even if the shareholding relationship changes, the structure of Line Yahoo depending on Naver will not change for a while."
Meanwhile, Line Plus, the Korean branch of Line Yahoo, is reportedly planning an explanatory meeting for all employees on the 14th regarding the Japanese government's pressure on Naver to sell its shares.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
