SoftBank weighs the largest public listing ever

SoftBank Ginza Store As SoftBank Group Prepares For Domestic Telecom Business IPO

LONDON: SoftBank Group Corp. is considering seeking a valuation of about $90 billion for its domestic wireless business in a planned initial public offering, according to people familiar with the matter.

SoftBank is speaking to advisers about selling a third — or about $30 billion — of the business in the IPO, the people said, asking not to be named as the talks aren’t public. Discussions are preliminary and the final valuation will depend on investors’ feedback, they said.

A representative for SoftBank declined to comment.

A $30 billion-IPO would make SoftBank Mobile the largest listing ever. Alibaba Group Holding Ltd. made its market debut in 2014 with a $25 billion offering, the biggest so far. SoftBank is seeking a higher price-to-earnings premium for its wireless business than its closest publicly traded peers, NTT Docomo Inc. and KDDI Corp., the people said. Shareholders believe the cash-rich company’s guaranteed dividend yield as well as its technology partnerships and the benefits of being linked to the parent firm, may help achieve that higher valuation, they said.

NTT Docomo ended Monday with a market value of almost $100 billion, while KDDI was at about $70 billion.

The SoftBank unit could be listed as early as the fourth quarter, the people said. Other companies coming to market this year with high expectations on valuations have found investors don’t always agree with them. Chinese smartphone maker Xiaomi Corp. currently has a market value of almost $50 billion following its debut in July, or just half of the figure touted when it began the process in 2017.

SoftBank founder Masayoshi Son said in his investor presentation Monday that he’s working toward a listing on the Tokyo Stock Exchange. The division’s free cash flow more than doubled to 154 billion yen ($1.4 billion) in the three months ended June.

The internet has been at the heart of Son’s vision of the future for years. During the advent of mobile internet via the smartphone, the billionaire got exclusive rights to sell the iPhone in Japan.

But recently, Son has begun turning SoftBank into a giant investment portfolio — with money injected into industries ranging from ride-hailing to co-working spaces — while looking to offload mobile assets. In April, SoftBank agreed to sell a controlling stake in Sprint Corp. — its US telecommunications business — to T-Mobile US Inc.