Softbank has unveiled plans for an initial public offering for its Japanese telco business as CEO Masayoshi Son looks to draw a line between investments and telecommunications.
The plan is to have the business listed within a year, and should offer greater clarity and rewards for investors. Such a move will essentially provide breathing room between the telco business and the more entrepreneurial ambitions of Son, as his Softbank Vision Fund continues to invest in businesses such as Uber.
“Through the listing of SB shares, SBG and SB expect that the respective roles and valuations of SBG, the parent company that is accelerating investments on a global scale, and SB, a company core to the Group’s telecommunications business, will be clear, making it possible to communicate information regarding the Group’s businesses to the market with greater clarity and thereby better respond to the various needs of investors,” the company said in a statement.
Separating the two business units will allow investors to reap the benefits of a profitable and stable telco business, while greater freedoms will be offered to Son as he continues to realise his deal-maker dreams. While there have been some big deals over the last couple of months, Son is no-where near hitting the limit of his $100 billion investment pot. Such a division could see the number, variety and risk-level of the deals increase.
Looking at the quarterly earnings of the group on the whole, operating profits fell short of analyst expectations, roughly $2.5 billion, though net sales did increase. Total sales came in at roughly $21.9 billion. Once again, the domestic Japanese business was the star of the show, though ARM contributed solidly as well.
Softbank has not yet stated how much of the business will be sold off, how much it expects to raise or what the money will explicitly be used for, but it might indicate Son is getting a bit bored of the slow-moving telco space. Son has repeatedly pointed towards the information revolution as a growth driver for the future, so it should come as little surprise the CEO is looking to spread his wings a bit further with investments.
What is clear is the Vision Fund is a money making machine. The fund has invested about $28 billion so far, but this does not include the Uber deal, and has contributed $2.1 billion to operating profit over the course of the last nine months. Son also has plans to IPO a couple of the businesses in the near future as well.
Son might be doing his best impression of a Japanese Del-Boy, but you have to hand it to him; the man knows how to make money.