Japan's Fuji Television Network Inc agreed on Monday to pay a total $1.65 billion to end a two-month take-over fight over an affiliate with Internet portal Livedoor Co in what analysts called a face-saving deal that offered little benefit to shareholders. The takeover fight, a rarity in Japan, had pitted Livedoor's combative president, Takafumi Horie, 32, against Japan's biggest media group and a pillar of the conservative business establishment.
Under the deal, Fuji TV, Japan's biggest TV network, said it would pay 131.5 billion yen ($1.22 billion) to buy out the whole of Nippon Broadcasting System Inc (NBS), including the purchase for 67 billion yen of a Livedoor unit which owns 32.4 percent of NBS.
Fuji also agreed to buy new Livedoor shares which will give it a 12.75 percent stake in the Internet company, and to form a business alliance with it, bringing the total value of the deal to 177.5 billion yen ($1.65 billion).
Livedoor had sought to gain influence over the Fuji Sankei media group, headed by Fuji TV. Radio broadcaster NBS, whose shares will be delisted, is a member of the conglomerate.
The two-month battle saw both firms claiming they could outdo the other in boosting NBS's enterprise value through business integration, but analysts said while the apparent compromise avoids a prolonged battle, it offers little benefit for shareholders.
"It's a typical, traditional face-saving deal," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co.
"Both Livedoor and Fuji gave up in the middle of the fight ... The deal will bring virtually nothing for the two firms' shareholders, but extra acquisition costs of NBS for Fuji TV shareholders and a steep fall in stock price for Livedoor stakeholders," he said, adding the agreement on a business alliance will have no major impact on their earnings.
Tsuyoshi Segawa, strategist at Shinko Securities, said Livedoor was a clear winner. "It managed to draw a lot of money from Fuji and a business tie-up in only two months."
Livedoor will receive a total 147 billion yen from Fuji, including its 103 billion yen sale of the 50 percent stake its group owns in NBS, about the same as the Internet firm spent to buy the 16.4 million shares in the radio broadcaster.
Fuji will pay 6,300 yen per NBS share under the deal, 5.9 percent higher than its initial tender offer price of 5,950 yen and a 7.1 percent premium to the share's Monday closing price.
"We decided on invest in Livedoor on expectations that the capital alliance will spawn a lot of Internet-related business ideas," Fuji TV chairman Hisashi Hieda told a news conference.
To fend off Livedoor's take-over attempt, Fuji has already paid 26 billion yen to raise its dividend payouts and other measures.
Livedoor's hostile bid for NBS caused alarm in business circles, and many firms have since rushed to boost dividend payments and resume cross-shareholdings among allies.
Some have started discussions on adopting "poison pill" provisions to fend off potential take-over attempts.
Media reports that the two parties had reached an agreement boosted shares in Livedoor - which hit a one-year low of 292 yen on Tuesday last week - by 6.38 percent to a close of 350 yen.
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