SoftBank unveils $3.4b buyback amid pressure from investors

TOKYO, Aug 07 (Reuters): Japanese technology investor SoftBank Group said on Wednesday it plans to buy back a hefty $3.4 billion of its shares, an action called for by shareholders including Elliott Management to bolster its stock price.
The logic for Masayoshi Son's tech behemoth to purchase its own shares has grown as its market capitalisation is far less than the value of its portfolio assets. The impetus comes at a time when SoftBank has been seeking to take a bigger role in artificial intelligence - albeit with a much more cautious investment stance than in the past after a period of rebuilding its finances.
It unveiled a plan to buy back up to 6.8 per cent of shares over the next 12 months, taking some of the sting out of an unexpected net loss for April-June.
That said, the plan falls short of calls for a bigger buyback programme and is just a fraction of SoftBank's 2.5 trillion yen ($17 billion) buyback announced in 2020, its biggest ever.
Elliott has pressed SoftBank for a $15 billion buyback programme, a person familiar with the matter said in June. The activist US fund founded by investor Paul Singer, which successfully lobbied for the 2020 buyback, has rebuilt a position in SoftBank worth more than $2 billion, the person added.
Chief Financial Officer Yoshimitsu Goto told reporters the board decided to proceed with a new share buyback after much discussion, judging it to be in the interests of the company.
"It's certainly possible that we may decide on another share buyback programme at some point in the future. Shareholder return is always a main theme of discussion among the board of directors," he said.
Goto said external pressure did not play a part in the buyback, adding "SoftBank is not the kind of company to make decisions based on the influence of an individual party."
SoftBank's first-quarter loss of 174.3 billion yen was roughly a third of the loss logged in the same period a year earlier but far short of an LSEG consensus estimate for 104.7 billion yen profit. The figures are based on reported net income attributable to shareholders and reflected a hit from higher taxes.