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Elliott rebuilds stake in SoftBank and pushes for $15 billion buyback, source says

Published 06/05/2024, 01:47 AM
Updated 06/05/2024, 12:01 PM
© Reuters. FILE PHOTO: People walk behind the logo of SoftBank Corp in Tokyo December 18, 2014.  REUTERS/Toru Hanai/File Photo

(Reuters) -Activist investor Elliott Management has rebuilt a stake worth more than $2 billion in Japanese technology investor SoftBank (TYO:9984) Group and is calling for a $15 billion share buyback, a person familiar with the matter told Reuters.

Shares in SoftBank jumped more than 5% after the news, before paring gains to end the day up 4.6% at 9,420 yen, the highest in three years.

Elliott has engaged directly with SoftBank's senior management over the past two to three months, the person said.

The U.S. hedge fund expects a buyback to deliver an immediate boost to the share price and act as a sign of SoftBank CEO Masayoshi Son's confidence in his strategy, according to the source.

SoftBank declined to comment, while Elliott did not immediately respond to a Reuters request for comment.

In 2020, Elliott amassed a $3 billion stake in SoftBank and pushed for a $20 billion buyback and improved corporate governance.

SoftBank had embarked on a buyback programme at the time. Elliott later sold off the remainder of its stake in 2022 after the conglomerate's portfolio was hit by a collapse in tech valuations.

The Japanese company's financial position is much stronger than in 2022, thanks to a blockbuster market debut for British chip-designer Arm Holdings (NASDAQ:ARM), in which SoftBank holds a 90% stake.

The rapid adoption of artificial intelligence has helped Arm's share price more than double since going public, boosting the value of SoftBank's assets after its portfolio of high-growth technology startups fell out of favour with investors.

SoftBank now trades at a large discount to the value of its assets.

Elliott has been active in Japan this year, building stakes in the country's biggest property group Mitsui Fudosan (OTC:MTSFY), and trading company Sumitomo Corp.

Previously, it had called for change at Dai Nippon Printing and scandal-hit Toshiba (OTC:TOSYY) Corp.

© Reuters. FILE PHOTO: People walk behind the logo of SoftBank Corp in Tokyo December 18, 2014.  REUTERS/Toru Hanai/File Photo

The Financial Times was the first to report the development.

($1 = 155.6500 yen)

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