SoftBank plunged more than 10 percent Tuesday as investors gave the thumbs down to the Japanese mobile giant's whopping $32 billion purchase of British iPhone chip designer ARM Holdings. The sharp drop bucked an upward trend in the broader market after a public holiday, with the benchmark index rising for the sixth straight session. Despite the tumble, the wider market ended higher with the Nikkei 225 index up 1.37 percent, or 225.46 points, at 16,723.31. The broader Topix index of all first-section shares increased 1.08 percent, or 14.29 points, to finish at 1,331.39.
SoftBank dropped 10.32 percent to 5,387 yen after the £24.3 billion ($32 billion) deal was announced Monday - meaning it lost around $7 billion in market value. The firm said it would offer £17 for each ARM share, a premium of around 43 percent compared with Friday's closing price, sending ARM rocketing more than 40 percent in London. The Japanese market was closed Monday. But Softbank's stock took a pummelling at the open as the deal aggravated concerns about the Japanese firm's balance sheet after a string of earlier acquisitions - including its 2013 purchase of still-unprofitable US mobile giant Sprint.
SoftBank has been selling off some assets, including gamemaker Supercell and trimming its investment in China e-commerce company Alibaba to raise cash. But it had more than $100 billion in debt at the end of March. Nintendo soared 14.36 percent to 31,770 yen, becoming more valuable than Sony. Its shares have doubled since July 6 at the time of the release of the wildly popular Pokemon Go smartphone game.
McDonald's Japan jumped 5.26 percent to 3,200 yen after it started giving away Pokemon figurines with sales of Happy Meals on Friday. The shares rocketed 23 percent at one stage Tuesday. "Investors are flocking to Pokemon-related stocks and McDonald's Japan is one of those benefiting from the boom," Mitsushige Akino, a Tokyo-based executive officer at Ichiyoshi Asset Management, told Bloomberg News. Messaging app Line tumbled 8.17 percent to 3,990 yen after it soared 32 percent on its Tokyo trading debut Friday in the year's biggest technology share sale.