KDDI Corp. said Friday it will scale down its plan to acquire a major stake in Jupiter Telecommunications Co. following a question about its legality raised by the Financial Services Agency.
KDDI will buy a 31.1 percent stake in the cable television operator, known as J:Com, in terms of voting rights in accordance with the revised plan, said the nation’s second-largest mobile phone operator.
In late January, KDDI said it would acquire a 37.8 percent stake in J:Com by purchasing three subsidiaries of Liberty Global Inc., a leading U.S. media company.
But the financial industry watchdog said it might be a violation of the financial instruments and exchange law, which requires that a tender offer be made when acquiring more than one-third of the shares in a publicly traded company on an off-exchange basis.
To reduce KDDI’s planned stake in J:Com, the scaled-back purchase scheme will place a 6.7 percent stake under a trust bank, KDDI said without identifying the bank.
KDDI, which currently leases fiber-optic infrastructure from Nippon Telegraph and Telephone Corp., hopes to boost its competitive edge by tapping into J:Com’s access lines and reduce its reliance on the NTT group.
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