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Mar 2, 2005

Livedoor can buy top stake in Nippon Broadcast

TOKYO - Livedoor Co is apparently financially capable of boosting its interest in Nippon Broadcasting System Inc by nearly 20%, fulfilling its goal of raising its total stake in the radio broadcaster to more than 50%.

Livedoor had 38.8 billion yen (US$371 million) in cash on hand as of December 31, and by February 18 had taken out a 59.3 billion yen bridge loan from Lehman Brothers Japan Inc to buy Nippon Broadcasting shares.

The Web portal operator on Thursday issued 80 billion yen in convertible bonds in an arrangement managed by Lehman Brothers. After paying back the bridge loan, the firm obtained the remaining 20.7 billion yen.

Livedoor is estimated to have spent roughly 16 billion yen through February 21 on acquiring Nippon Broadcasting shares, excluding the large portion it purchased February 8. This means that the company now has more than 40 billion yen in liquidity.

Based on Nippon Broadcasting's Monday closing price, this amount is enough to purchase more than 6 million shares of the radio broadcaster, or a stake of almost 20%. Livedoor had already owned 37.65% of the broadcaster as of February 21, and if it keeps buying Nippon Broadcasting shares on the market as it has pledged, it is theoretically possible for the firm to gain a majority interest.

Last week's CB issue will not increase Livedoor's interest-bearing debt, which totaled 15.5 billion yen as of December 31, because the bonds carry a zero coupon rate. But if Lehman Brothers converts the bonds, this will affect Livedoor's shareholders' equity, which stood at 57 billion yen as of the end of December.

(Asia Pulse/Nikkei)

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