Rakuten Inc., the largest shareholder of Tokyo Broadcasting System Inc., plans to ask the TV broadcaster to buy back its stake, ending a 3 1/2-year battle for control of the broadcaster, industry sources said.
Japan’s largest Internet mall operator apparently decided on the move because it is no longer possible to integrate its management with the broadcaster’s, given TBS’ plan to introduce a holding company system in April, they said.
Rakuten, which holds more than 19 percent of TBS, proposed the management integration in October 2005. After TBS rejected the plan, the two engaged in a drawn-out fight over the matter.
Under the holding company system, a shareholder can only own a stake of up to 33 percent in TBS.
A shareholder who has a stake of more than 33 percent can block important decisions at general shareholders’ meetings, but no one will be able to enjoy this right once the holding company system is implemented.
Rakuten has spent more than ¥100 billion to integrate itself with the broadcaster but now needs to redefine its strategy, the sources said.
TBS may have to pay tens of billions of yen for the buyback from Rakuten, they added.
In December last year, TBS gained stockholder approval to become a holding company. Rakuten, its biggest shareholder, opposed the plan at the meeting.
Under corporate law, a stockholder can ask a company to buy back its stake to sever its relationship with the company if a resolution opposed by the stockholder is adopted at a shareholders’ meeting.
TBS’ share price has been declining.
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