Livedoor vs. Fuji TV: A Brewing Battle for Control of Nippon Broadcasting

Strategic Insights -

A fierce struggle between Livedoor Co. and Fuji Television Network Inc. is unfolding over the Japanese radio broadcaster Nippon Broadcasting System Inc. Livedoor, a Web portal operator, hopes to acquire a majority stake in Nippon Broadcasting, while Fuji TV, which already holds 36.47% of the outstanding shares, seeks to maintain control. The fate of the radio broadcaster and its potential alliance with the Fujisankei Communications Group hangs in the balance.

Key Takeaways:

  • Livedoor holds 45% of the voting rights in Nippon Broadcasting, but Fuji TV's 36.47% stake gives it veto power over special resolutions at the general shareholders' meeting.
  • Nippon Broadcasting plans to issue equity warrants to Fuji TV, which would give the broadcaster control over the company's management and prevent Livedoor from taking it over.
  • If the injunction against the warrant issuance is denied, Fuji TV would gain an overwhelming advantage, allowing it to acquire up to 140% of the existing outstanding shares.
  • Livedoor faces two major hurdles: obtaining a majority of Nippon Broadcasting shares by March 31 and overcoming Fuji TV's veto power at the June shareholders' meeting.
  • Approval of board selection, business operations, and merger resolutions would require a two-thirds majority, giving Fuji TV significant influence over Livedoor's plans.
  • If Livedoor fails to acquire a majority stake, Nippon Broadcasting's earning potential would likely fall due to the lack of cooperation from the Fujisankei group.

Statistics:

  • 36.47%: Fuji TV's stake in Nippon Broadcasting
  • 45%: Livedoor's voting rights in Nippon Broadcasting
  • 140%: The maximum percentage of outstanding shares that Fuji TV could acquire through equilibrium warrants
  • 24: Date of Nippon Broadcasting's plans to issue equity warrants to Fuji TV
  • 23: Date of Fuji TV's tender offer announcement
  • 31: Deadline for Livedoor to acquire a majority stake in Nippon Broadcasting
  • June: Date of the general shareholders meeting where Livedoor's managerial options will be determined

Sources:

  • "Nippon Broadcasting to issue warrants to Fuji TV" (no date provided)
  • "Livedoor f iles for injunction against warrant issuance" (no date provided)
  • "Tokyo District Court to decide on injunction by end of week" (no date provided)