Smartkarma North Asia Weekly: JD Health, McDonald’s Japan, Softbank Group, & HDC Hyundai Development

Softbank Group -  Buybacks and New Listings Have Narrowed Discount to Two-Year Peak

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Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<p>Softbank Group shares jumped 5% on news the company is mulling a “slow burn” buyout which apparently consists of ongoing buybacks until CEO Son’s current holdings are enough to squeeze out minorities. At the current share price, which would likely be impossible to maintain absent a market selloff, Softbank could just barely get that done with cash from recent asset sales but there would be no money left over for further investments. We think this is unlikely but a steady buyback policy would be great news in itself.</p>

Softbank Group shares jumped 5% on news the company is mulling a “slow burn” buyout which apparently consists of ongoing buybacks until CEO Son’s current holdings are enough to squeeze out minorities. At the current share price, which would likely be impossible to maintain absent a market selloff, Softbank could just barely get that done with cash from recent asset sales but there would be no money left over for further investments. We think this is unlikely but a steady buyback policy would be great news in itself.

Softbank Group - Slow Burn Buyout Unlikely but Helps with the Discount so that Is Good