British mobile phone giant Vodafone Group PLC has begun final preparations to conduct a takeover bid of Japan Telecom Co. so it can establish management control over the Japanese telecommunications firm, industry officials said Sunday.
Vodafone intends to increase its stake in Japan Telecom to 66.7 percent from its current 45 percent, a move that would render other shareholders unable to use their veto power and effectively give the British firm management control, the officials said.
If Vodafone secures the larger stake, the J-Phone group -- an affiliate of Japan Telecom and the nation's No. 3 cellular service provider -- will be expected to begin an overseas expansion. The group's relatively inefficient fixed-phone business, however, may separated and sold, they said.
Vodafone, the world's largest mobile phone company, has apparently begun preparations to buy stakes from Japan Telecom's other large shareholders, such as East Japan Railway Co., which owns 15.1 percent of the outstanding shares, the officials said.
Vodafone first invested in what is now J-Phone's holding company in 1999 and obtained a 15 percent share in Japan Telecom in December 2000. It eventually became Japan Telecom's largest shareholder this spring with 45 percent of the company's shares.
The JR group companies, including Central Japan Railway Co. (JR Tokai) and West Japan Railway Co., have been Japan Telecom shareholders since its inauguration and maintain deep ties with JT as evidenced by the communication networks it has set up along railway tracks nationwide.
Japan Telecom also has many former JR group officials as its executives.