Yahoo's 35% of Yahoo Japan will be bought by Yahoo Japan, not Softbank.
Morgan Stanley and Deutsche Bank point out the advantages to Yahoo! Japan buying back Yahoo's 35% of Yahoo! Japan today. Yahoo will receive $5 billion after taxes.
If this deal goes through, there is no doubt YHOO will be trading in the $20's. By the way MM is concentrating their primary strategy in Mobile business, definitely I think a perfect strategy to increase revenue and earnings. Cramer said buy buy buy YHOO because of MM.
Sentiment: Strong Buy
they must wearing the office door out! i've read at least 100 times they started negotiations! must be a draft so they won't just keep it open! they have seen each other more than their family! that's okay as long as we win! yahoo remember in the negotiations- a man is like a rose watch out for the #$%$!
Deutsche Bank points out a buyback of the Yahoo shares, done only by Yahoo Japan, not SoftBank with its separate balance sheet involved in the Sprint deal, wouldn’t stress its balance sheet or result in a discounted multiple for Yahoo Japan.
YHOO Japan management not Softbank (Mr. Sons) have all the reason to make negotiation with YHOO to buyback YHOO 35% stakes. Doing it will give them the majority control of their company, not Softbank and YHOO currently. It will give them all the incentives doing it really. I expect this deal to go all the way with no doubt about it. YHOO Japan management will listen to Morgan Stantley advice. I can wait for the announcement of the deal.
Sentiment: Strong Buy
Morgan Stanley’s note says that the extreme bull case for Yahoo Japan is JPY43,500 per share, based only on buying back the Yahoo shares. The stock is currently at HPY 27,300.
Deutsche Bank also points out that a buyback of the Yahoo shares, done only by Yahoo Japan — not SoftBank with its separate balance sheet involved in the Sprint deal — wouldn’t stress its balance sheet or result in a discounted multiple for Yahoo Japan.
This analysis would suggest that any institutions who are long Yahoo and short Yahoo Japan as a hedge are probably wise to cover their short.
It also brings up the advantage to Yahoo Japan of paying a premium to Yahoo for its stake back, so that it can proceed with its own share count shrink and increase in EPS.