Rakuten to ask TBS to buy back stake

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TOKYO, March 20 Kyodo -
Rakuten Inc., the largest shareholder of Tokyo Broadcasting System Inc., plans
to ask the TV broadcaster to buy back its stake, industry sources said Friday.
Japan's largest Internet mall operator has apparently decided on the move as it
is no longer possible to integrate its management with the broadcaster given
TBS' plan to introduce a holding company system in April, they said.
Rakuten, which holds a stake of more than 19 percent in TBS, proposed the
management integration in October 2005. With TBS rejecting the plan, the two
have engaged in a tug-of-war over the matter for three and a half years.
Under the holding company system, a shareholder will only be able to own a
stake of up to 33 percent in TBS. A shareholder with a stake of at least 33
percent can block important decisions at general shareholders meetings.
Rakuten has spent more than 100 billion yen on its efforts to integrate with
the broadcaster, but it now needs to redefine its strategy, the sources said.
TBS may pay tens of billions of yen to Rakuten to buy back the shares, they added.
In December last year, TBS gained approval from its stockholders to become a
holding company.
Rakuten, as TBS's biggest shareholder, opposed the plan for the holding company
at the TBS shareholders meeting.
Under the 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.
Whether Rakuten will exercise the right by the end of this month has been a
focus of attention in the industry.
TBS share price has been on the decline. Rakuten incurred a net loss of 54.9
billion yen in its 2008 business year to December, with an appraisal loss on
TBS shares of 67.1 billion yen.
==Kyodo