Oct. 13 (Bloomberg) -- Rakuten Inc., operator of Japan's largest online shopping service, bought a stake in Tokyo Broadcasting System Inc., the nation's third-biggest broadcaster, and plans a takeover bid for the $6.2 billion company.

Rakuten held 15.46 percent of Tokyo Broadcasting as of Oct. 12, according to a statement to the Tokyo Stock Exchange today. The market value of Rakuten is 1.02 trillion yen ($8.9 billion), compared with 709 billion yen for Tokyo Broadcasting based on today's closing share prices.

Offering more television clips online would help Rakuten defend its share of Japan's 5.6 trillion yen online shopping market from a challenge by Yahoo Japan Corp. Chief Executive Hiroshi Mikitani, 40, has bought more than 30 companies since he founded Rakuten in 1997 to attract customers to sites selling tours, concert tickets and electronics.

``Internet companies want content, that's why they are after the broadcasting companies,'' said Hideaki Kurimoto, who helps oversee the equivalent of about $2.7 billion at Meiji Dresdner Asset Management Co. in Tokyo. ``Without content, it's difficult to see further growth.''

Takeover bids have drawn shareholders' attention in Japan this year after a two-month tussle between Internet services company Livedoor Co. and Fuji Television Network Inc., Japan's largest broadcaster, over a controlling stake in an affiliate.

Tokyo Broadcasting's shares today rose 15 percent to 3,730 yen, the biggest advance since March 1986, making it the biggest gain by percentage on the MSCI World Index today. Shares of Rakuten rose 0.9 percent to 86,600 yen.

`Abrupt'

``This short-term and large-scale acquisition of our shares strikes us as very abrupt,'' Tokyo Broadcasting said earlier in a release to the Tokyo Stock Exchange, following a Rakuten press conference today. ``We are carefully considering our response.''

Last month, Rakuten said it will buy U.S. Internet advertising company LinkShare Corp. for $425 million to gain access to 500 clients including Dell Inc. and American Express Co. The company is also drawing people to its services after forming the Rakuten Eagles, Japan's first new baseball team in 50 years.

Rakuten met with Tokyo Broadcasting's President Hiroshi Inoue on Sept. 29 to discuss merging under a holding company, according to Rakuten's statement.

Inoue said at a Tokyo news briefing tonight that the company hasn't agreed to hold talks with Rakuten, although it has received the proposal.

Rakuten said in its statement that it plans to offer stock options to management and employees of the merged company. it won't ``carry out restructuring of the labor force to boost short-term profits,'' according to the statement.

`Poison Pill'

The company spent 88 billion yen on its 15.46 percent stake in Tokyo Broadcasting, Atsushi Kunishige, a Rakuten executive vice president, said today at a news conference in Tokyo. He declined to comment if and when Rakuten will increase its stake in the broadcaster.

The recent takeover attempts prompted Japan's ruling Liberal Democratic Party in March to delay plans to make it easier for overseas companies to buy Japanese ones. The government also released in May ``poison pill'' guidelines that would raise acquisition costs by triggering the sale of new shares.

Tokyo Broadcasting in May offered stock options that can be converted to 80 billion yen of its shares to Nikko Cordial Corp. to try to block hostile takeovers. The broadcaster last month said it sold 9.92 million shares to advertising agency Dentsu Inc., trading company Mitsui & Co., electronics retailer Bic Camera and broadcaster Mainichi Broadcasting System Inc.

To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net; Takahiko Hyuga in Tokyo at thyuga@bloomberg.net.

Last Updated: October 13, 2005 09:06 EDT