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Photographer: Kiyoshi Ota / Bloomberg
Photographer: Kiyoshi Ota / Bloomberg
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Following the announcement on the 29th that NTT will hold a board meeting on the same day to convert NTT Docomo into a wholly owned subsidiary through a public tender offer (TOB), the purchases are focused on Docomo shares in the market. from Tokyo. There is growing expectation that NTT will be the first to respond to Prime Minister Yoshii Suga’s reduction in mobile phone rates.
At 11:30, docomo shares are rising to 3,213 yen, which is full of price range restrictions. The Nihon Keizai Shimbun reported electronically on the 28th about making it a wholly owned subsidiary. According to Bloomberg data, NTT currently has a 66.21% stake in Docomo. If the remaining 34% is acquired at the closing price of 2775 yen on the 28th with a 30% premium added, the acquisition scale will be approximately 4 trillion yen.
Observations:NTT holds a board meeting today to make Docomo a wholly owned subsidiary
Prime Minister Kan has aimed to reduce mobile phone rates as soon as possible since he was Secretary General of the Secretariat, referring to examples from other countries, and on the 18th he gave instructions to Minister of General Affairs Ryota Takeda. When asked about NTT’s acquisition of Docomo as a subsidiary, General Secretary Katsunobu Kato said at a press conference on the 29th that “he would like to expect positive consideration of the price cuts.”
“I have the impression that Japan’s leading companies have moved faster than expected in response to the Kan administration’s policy of reducing communication charges,” said Hideyuki Ishiguro, senior strategist at Daiwa’s Investment Information Department. Securities. It was assessed as positive for Japanese equities as a whole because it would generate expectations from foreign investors that the Japanese industry would reorganize.
Mitsunobu Tsuruo, an analyst at Citi Group Securities, wrote in a memo in English that DoCoMo’s share price had adjusted anaerobically due to pressure on earnings due to the reduction in mobile phone charges, but TOB’s expectations they are working positively and increasing. Description. The fair value is 3,200 yen, and if a 30% premium is given, the TOB is expected to settle at around 4,160 yen.
Smart Carma analyst Travis Randy said in a report in English that NTT does not need to add a premium to make Docomo a subsidiary, as it already owns more than 66% of Docomo shares. .. DoCoMo is already trading at a premium compared to other companies in the same industry, and the impact of Prime Minister Kan’s policy of reducing mobile charges seems to be a good excuse for not paying a large premium.
On the other hand, NTT shares temporarily fell 5.8% to 2,162 yen, but were then reluctant to drop to 2,225 yen. Considering that the standard value considering ex-dividend rights is 2,246 yen, the market reaction does not necessarily appear to be negative. Citi Securities’ Mr. Tsuruo noted that converting it into a subsidiary places a heavy burden on NTT’s finances. There is a high possibility that returns to shareholders will be reduced, but in the long term, there is a positive view that it is possible to capture profits that have been flowing out of the group, accelerate cost reductions and expand the margin to improve profitability . Was.
Major telecom stocks are also falling apart from Docomo. Jeffreys Securities analyst Athur Goyal said in an English-language report that the government owns nearly 30% of NTT’s shares, so if the government orders a price cut after a wholly owned subsidiary, NTT will do the same. If that happens, it will only be a matter of time before other big telcos follow the price cuts.
Among mobile phone companies, Rakuten Co., Ltd. has the most notable drop. “All questions come up about Rakuten’s positioning and strategy,” Goyal said when all mobile operators cut prices. KDDI shares and Softbank shares have been weak compared to standard value considering ex-dividend rights.
(We will update by adding the stock price background and the mobile charge reduction)
