Softbank Corp 56ID Correction of Announcement of October 1, 2012
Softbank Corp (56ID) - Correction of Announcement of October 1, 2012
RNS Number : 0230O
Softbank Corp
05 October 2012
October 5, 2012
Correction of Announcement of Making eAccess Ltd.
a Wholly-owned Subsidiary of SOFTBANK CORP.
Through Share Exchange
And
Business Alliance between SOFTBANK MOBILE Corp. and eAccess Ltd.
SOFTBANK CORP. (hereafter "SOFTBANK") and eAccess Ltd. (hereafter "eAccess")
announce that the two companies have made the following correction in the
press release issued on October 1, 2012. Corrections are underlined. Please
refer to the attachment for the corrected press release.
Before correction
3. Outline of Share Exchange
(1) Schedule of Share Exchange
September 28, 2012 Resolution at the Board of
Directors' meeting (SOFTBANK)
October 1, 2012 Resolution at the Board of
Directors' meeting (eAccess)
October 1, 2012 Execution of the Agreement
(SOFTBANK, eAccess)
February 22, 2013 (tentative) Final day of share trading (eAccess)
February 25, 2013 (tentative) Date of delisting (eAccess)
February 28, 2013 (tentative) Effective date of the Share Exchange
After correction
3. Outline of Share Exchange
(1) Schedule of Share Exchange
September 27, 2012 Resolution at the Board of
Directors' meeting (SOFTBANK)
October 1, 2012 Resolution at the Board of
Directors' meeting (eAccess)
October 1, 2012 Execution of the Agreement
(SOFTBANK, eAccess)
February 22, 2013 (tentative) Final day of share trading (eAccess)
February 25, 2013 (tentative) Date of delisting (eAccess)
February 28, 2013 (tentative) Effective date of the Share Exchange
October 1, 2012
(Attachment) Corrected Press Release
Announcement of Making
eAccess Ltd. a Wholly-owned Subsidiary of SOFTBANK CORP. Through Share
Exchange
And
Business Alliance between SOFTBANK MOBILE Corp. and eAccess Ltd.
SOFTBANK CORP. ("SOFTBANK") and eAccess Ltd. ("eAccess") hereby announce that
both companies entered into an agreement (the "Agreement") regarding a share
exchange (kabushiki koukan) (the "Share Exchange") whereby SOFTBANK will
become the sole parent company of eAccess and eAccess will become its
wholly-owned subsidiary of SOFTBANK.
It is expected that eAccess common shares will be delisted from Tokyo Stock
Exchange, Inc. (the "Tokyo Stock Exchange") in late February, 2013, prior to
the effective date of the Share Exchange, if the Share Exchange is implemented
with the approval at the general meeting of shareholders and other necessary
procedures; provided, however, that the date of delisting will be changed if
the effective date of the Share Exchange is changed by an agreement between
SOFTBANK and eAccess.
In addition, SOFTBANK MOBILE Corp. ("SOFTBANK MOBILE"), a consolidated
subsidiary of SOFTBANK, and eAccess hereby announce that the both companies
have reached a framework agreement on business alliance (the "Business
Alliance").
1. Purpose of the Share Exchange and Making eAccess a Wholly-owned Subsidiary
We aim to establish a structure which will allow us to combine management
resources effectively and efficiently, and accelerate the penetration of the
mobile broadband service.
Our current plan is that eAccess will continue to operate the mobile
communications business under the "EMOBILE" brand after the Share Exchange,
and we have no specific plan to change the basic policy of eAccess' business
including the mobile communications business and the fixed telecommunication
business at this moment.
2. Effects of Making eAccess a Wholly-owned Subsidiary
(1) Shared utilization of mobile communications network
SOFTBANK MOBILE, a consolidated subsidiary of SOFTBANK, and eAccess will share
mobile communications network resources. SOFTBANK MOBILE will provide eAccess
with access to its 900 MHz network (Band8, operating band specified in 3GPP)
and 2.1 GHz network (Band1, operating band specified in 3GPP), which will
allow eAccess to provide the voice and data communications service in broader
areas. Meanwhile eAccess will provide SOFTBANK MOBILE with access to its 1.7
GHz (Band3, operating band specified in 3GPP) FDD LTE network for the data
communications service, which will allow SOFTBANK MOBILE to use both 2.1 GHz
and 1.7 GHz for its FDD LTE service.
(2) Mutual collaboration on efficient operation of base station sites
SOFTBANK MOBILE and eAccess will conduct a study for the effective use of base
station sites for the shared networks, and share, newly build or transfer base
stations sites where appropriate, allowing SOFTBANK MOBILE and eAccess to
expand our service coverage more quickly and to decrease capital expenditures
and maintenance costs.
(3) Creation of synergies
a) Enhancement of sales force
The number of retailers of SOFTBANK MOBILE was approximately 7,000 as of the
end of August 2012, and the number of retailers of eAccess was approximately
2,000 as of the end of August 2012. Products and services of SOFTBANK MOBILE
and eAccess will be available at both retailers. In addition, SOFTBANK
TELECOM Corp., a corporate sales force of the SOFTBANK Group, will provide
products and services of eAccess (under "EMOBILE" brand). Improvement of both
services' competitiveness is expected through the shared utilization of mobile
communications networks, leading to the enhancement of the sales force and
expansion of the customer base.
b) Reduction of mobile device procurement costs
An increase of mobile device sales is expected by the abovementioned
enhancement of sales, which will also lead to an increase of procurement units
and joint procurement, providing the opportunity for procurement cost
reduction through volume purchase.
c) Sharing of backbone network
We will aim to reduce costs by sharing eAccess' backbone network for the
mobile communications and ADSL services, and the SOFTBANK Group's backbone
network.
3. Outline of Share Exchange
(1) Schedule of Share Exchange
September 27, 2012 Resolution at the Board of Directors' meeting
(SOFTBANK)
October 1, 2012 Resolution at the Board of Directors' meeting
(eAccess)
October 1, 2012 Execution of the Agreement (SOFTBANK, eAccess)
February 22, 2013 (tentative) Final day of share trading (eAccess)
February 25, 2013 (tentative) Date of delisting (eAccess)
February 28, 2013 (tentative) Effective date of the Share Exchange
The Share Exchange is planned to be conducted as a simplified share exchange
under Article 796, Paragraph 3, of the Companies Act, which does not require
approval of the general meeting of shareholders of SOFTBANK, while it requires
approval of the general meeting of shareholders of eAccess which is expected
to be held around January 2013. We will promptly announce the specific dates
for the procedures of the Share Exchange once they are decided.
The abovementioned schedule is subject to change upon an agreement between
SOFTBANK and eAccess.
Note 1: The implementation of the Share Exchange will be subject to (i)
approval at the general meeting of shareholders of eAccess, (ii) if required,
approval at the general meeting of shareholders of SOFTBANK, (iii) the
completion of filing procedures required under the Anti Monopoly Act of Japan
(including the circumstance where the Fair Trade Commission has not made any
pre-notification of a cease and desist order by the Fair Trade Commission
pursuant to the Anti Monopoly Act or any motion for an urgent suspension order
pursuant to the Anti Monopoly Act, and where the statutory waiting period
under the Anti Monopoly Act has expired), and (iv) if required, the completion
of any applicable procedures under anti monopoly laws in foreign jurisdictions
including pre-filing requirements.
(2) Method of Share Exchange
SOFTBANK will become the sole parent company of eAccess and eAccess will
become the wholly owned subsidiary of SOFTBANK upon the Share Exchange.
(3) Details of Allotment upon Share Exchange
Upon the Share Exchange, SOFTBANK will deliver to each shareholder of eAccess
(other than SOFTBANK) who is recorded in the shareholder registry as of the
point in time immediately preceding the acquisition of all of the issued
shares of eAccess by SOFTBANK through the Share Exchange, the number of
SOFTBANK common shares calculated by multiplying the total number of eAccess
common shares held by the relevant shareholder, by the Exchange Rate (as
defined below), in exchange for eAccess shares held by the relevant
shareholder; provided, however, that (i) with regard to the shareholders who
exercised appraisal rights attached to the eAccess shares held by such
shareholders pursuant to Article 785 of the Companies Law, SOFTBANK shares
will be delivered to eAccess in place of such shareholders and (ii) if the
number of shares that shall be delivered to a shareholder includes any
fraction less than one (1) share, SOFTBANK shall pay to such shareholder money
calculated in accordance with Article 234 of the Companies Law, with any
fraction less than one (1) yen being rounded up to the nearest yen.
The "Exchange Rate" shall mean 16.74, which is the ratio obtained by dividing
52,000 yen (that is considered as the appraisal value of the common stock of
eAccess) by 3,108 yen (the "Base Price") (that is the average of the closing
price of regular trading of the common stock of SOFTBANK on the Tokyo Stock
Exchange during the three (3) months prior to the execution date of the
Agreement, with any fraction less than one (1) yen being rounded up to the
nearest yen); provided, however, that, if the average of the closing price of
regular trading the common stock of SOFTBANK on the Tokyo Stock Exchange on
each of the 10 trading days after (and excluding) the execution date of the
Agreement with any fraction less than one (1) yen being rounded up to the
nearest yen (the "Base Price After Public Announcement") is less than 85% of
the Base Price, the Exchange Rate shall be adjusted to the ratio obtained by
dividing 52,000 yen by the Base Price After Public Announcement (rounded up to
two decimal places).
Although SOFTBANK plans, in principle, to issue shares of common stock of
SOFTBANK as consideration for the Stock Exchange, SOFTBANK may use its
treasury stock as the consideration, in whole or in part, at the time of the
Share Exchange.
The total number of SOFTBANK common shares to be delivered upon the Share
Exchange may be changed due to the adjustment of the Exchange Rate described
above, exercise of stock acquisition rights (including those attached to bonds
with stock acquisition rights) of eAccess by holders of such rights and other
reasons. As such it has not been fixed at this moment.
Note1: Handling of Shares Less Than One Unit
Shareholders who acquire shares less than one (1) unit of SOFTBANK shares as a
result of the Share Exchange may take the following procedures with respect to
the SOFTBANK shares.
Purchase of shares less than one (1) unit by SOFTBANK, by which a shareholder
who holds shares less than one (1) unit of SOFTBANK shares may demand that
SOFTBANK purchase those shares in accordance with Article 192 of the Companies
Law.
Note2: Treatment of a Fraction of Less than One Share
If the number of shares that shall be delivered to a shareholder (other than
SOFTBANK) includes any fraction less than one (1) share, SOFTBANK shall pay
money in the amount equivalent to such fraction of share, with any fraction
less than one (1) yen being rounded up to the nearest yen, to such shareholder
pursuant to Article 234 of the Companies Law.
(4) Handling of Stock Acquisition Rights and Bonds with Stock Acquisition
Rights upon Share Exchange
Handling of stock acquisition rights issued by eAccess is provided in the
Agreement as described below.
SOFTBANK shall, upon the Share Exchange, deliver to the holders of eAccess
stock acquisition rights (excluding the stock acquisition rights attached to
Convertible Bonds due 2016) that remain and are not exercised as of the time
immediately preceding the time when the Share Exchange takes effect, in
exchange for such stock acquisition rights, SOFTBANK stock acquisition rights
that have the same economic value as the holders would receive if eAccess
purchased such stock acquisition rights in cash at a fair value just before
the closing of the Share Exchange, taking the Exchange Rate into
consideration.
If approval of the Agreement at the general meeting of shareholders of eAccess
necessary for the Share Exchange is obtained, eAccess will redeem all of
Convertible Bonds due 2016 (bonds with stock acquisition rights) on or prior
to the effective date of the Share Exchange in accordance with their terms and
conditions, and SOFTBANK will cooperate in financing for such redemption.
4. Grounds for Calculation of Exchange Ratio in Share Exchange
(1) Basis of Calculation
The Exchange Rate is described in 3. (3) above.
As described in 2. above, SOFTBANK believes that the Business Alliance between
SOFTBANK MOBILE, a consolidated subsidiary of SOFTBANK, and eAccess creates
synergies such as the expansion of customer base through utilization of mobile
communications network held by eAccess, effective operation of base stations
and enhancement of sales force, as well as cost reduction in the procurement
of mobile terminals and backbone network sharing.
eAccess believes that, after the Share Exchange, the Business Alliance with
SOFTBANK MOBILE, a consolidated subsidiary of SOFTBANK as described in 2.
above, will allow them to secure steady revenue from enhanced sale force
utilizing 900 MHz and 2.1 GHz network held by SOFTBANK MOBILE and provision of
eAccess's 1.7 GHz FDD LTE network to SOFTBANK MOBILE, providing further
improvement of eAccess's enterprise value for eAccess shareholders. With the
Stock Exchange, the share of eAccess will be delisted, however eAccess
shareholders will receive SOFTBANK shares in exchange which will include the
enterprise value considering the effect of the Business Alliance, therefore
eAccess shareholders will be able to maintain their investment including the
Business Alliance.
The closing price of the common stock of eAccess as of September 28, 2012 is
15,070 yen. SOFTBANK and eAccess determined the appraisal value of the common
stock of eAccess through mutual consultation, taking into comprehensive
consideration the current share prices of eAccess, as well as (i) the mobile
communications network held by eAccess, (ii) the customer base held by
eAccess, and (iii) synergies that are expected to be generated together with
SOFTBANK MOBILE.
The number of cumulative subscribers for the mobile service of eAccess
(including the LTE service) reached at 4.2 million as of the end of August
2012. The number of cumulative subscribers for the mobile service of SOFTBANK
MOBILE reached at 30.14 million as of the end of August 2012.
To ensure the fairness and appropriateness upon calculation of the share
exchange ratio, SOFTBANK and eAccess decided to separately engage independent
financial advisors to the financial analysis on the share exchange ratio.
SOFTBANK appointed Mizuho Securities Co., Ltd. ("Mizuho Securities") and
PLUTUS CONSULTING Co., Ltd. ("PLUTUS Consulting"). eAccess appointed Goldman
Sachs Japan Co., Ltd. ("Goldman Sachs"). The outline of the financial
analysis conducted by these financial advisors with regard to the share
exchange ratio set out in the Agreement is described in Exhibit 1 "The
Overview of the Financial Analyses regarding the Stock Exchange Ratio by the
Respective Financial Advisors".
(2) Background to Calculation
Each of SOFTBANK and eAccess has taken into comprehensive consideration
various factors including the financial condition, assets, future prospects of
its business and performance of each party, while SOFTBANK refers to the
financial analysis on the share exchange ratio made by Mizuho Securities and
PLUTUS Consulting, and eAccess refers to the financial analysis on the share
exchange ratio made by Goldman Sachs. Both parties then carefully deliberated
and negotiated on the share exchange ratio. As a result, today, SOFTBANK and
eAccess have come to the conclusion that the share exchange ratio described in
3. (3) "Details of Allotment upon Share Exchange" of this press release is
appropriate, and agreed upon the share exchange ratio.
(3) Relationship with Financial Advisors
Both Mizuho Securities and PLUTUS Consulting as financial advisors of
SOFTBANK, are independent from SOFTBANK, do not fall under the concerned
parties of SOFTBANK, and do not have any special interest which should be
noted in regard to the Share Exchange.
Certain affiliates of Goldman Sachs, which is acting as a financial adviser of
eAccess, hold an aggregate of 1,057,168 shares of common stock of eAccess
(equivalent to approximately 30.5 percent of the issued and outstanding shares
of common stock of eAccess), one officer of Goldman Sachs is a member of the
eAccess board of directors, and one officer of Goldman Sachs or its affiliates
is a member of the Softbank board of directors. Goldman Sachs also
established the Chinese walls designed to cause its financial advisory team to
act independently from the Goldman Sachs affiliates holding the eAccess
shares.
(4) Expectation of and Reasons for Delisting
Upon the Share Exchange, eAccess will become a wholly-owned subsidiary of
SOFTBANK as of the effective date of the Share Exchange. We will announce the
specific dates for the procedures of the Share Exchange, once they are
decided.
While eAccess shares are listed on the first section of the Tokyo Stock
Exchange, it is expected that eAccess shares will be delisted upon the Share
Exchange, following prescribed procedures pursuant to the Securities Listing
Regulations of the Tokyo Stock Exchange. eAccess shares will not be traded on
the Tokyo Stock Exchange after the delisting.
Upon the Share Exchange, eAccess shareholders will receive, in exchange for
their eAccess shares, SOFTBANK common shares which are also listed on the
first section of the Tokyo Stock Exchange.
We think that we can provide liquidity of shares continuously to the
shareholders who are allotted 100 shares (equivalent to one (1) unit of
SOFTBANK shares) or more of SOFTBANK common stock upon the Share Exchange,
since SOFTBANK shares allotted to eAccess shareholders upon the Share Exchange
are listed on the Tokyo Stock Exchange and can be traded on the stock market
even after the Share Exchange.
Though the shareholders who are allotted less than 100 shares (equivalent to
one (1) unit of SOFTBANK shares) of SOFTBANK common stock upon the Share
Exchange can not sell such shares on the Tokyo Stock Exchange, they can
utilize SOFTBANK's purchase program of shares less than one (1) unit of
SOFTBANK shares if they want. Please refer to Note 1 in 3.(3) above regarding
its details. In addition, please refer to Note 2 in 3. (3) above with regard
to the details of handlings in case where the number of shares that shall be
delivered to a shareholder includes any fraction less than one (1) share.
(5) Measures to Ensure Fairness
SOFTBANK obtained from Mizuho Securities an opinion dated October 1, 2012,
stating that, based on certain conditions including those described in Exhibit
1, the agreed share exchange ratio is appropriate for SOFTBANK from a
financial perspective (so called "fairness opinion"), as well as the financial
analysis with regard to the share exchange ratio mentioned above. eAccess
obtained from Goldman Sachs an opinion dated October 1, 2012, stating that,
based on certain conditions including those described in Exhibit 1, the agreed
share exchange ratio is appropriate or fair for eAccess shareholders (other
than SOFTBANK and its affiliates) from a financial perspective (so called
"fairness opinion"), as well as the financial analysis with regard to the
share exchange ratio mentioned above. eAccess obtained from UBS
SecuritiesJapan Co., Ltd. an opinion stating that, based on certain
conditions, the agreed share exchange ratio is appropriate or fair for eAccess
shareholders (other than SOFTBANK and its affiliates) from a financial
perspective (so called "fairness opinion").
SOFTBANK appointed Mori Hamada & Matsumoto as its legal advisor, and eAccess
appointed Anderson Mori & Tomotsune and Nagashima Ohno & Tsunematsu as its
legal advisors. Both parties obtained legal advice from their respective
legal advisors with regard to appropriate procedures of the Share Exchange and
the method and process for their decision making.
(6) Measures to Avoid Conflicts of Interest
Both parties do not have any personnel relationship such as dispatch of
directors to each other. Therefore, as no conflict of interest arises between
SOFTBANK and eAccess, both parties have not taken any measures to avoid
potential conflicts of interest.
Among directors of eAccess, Dr. Sachio Semmoto and Mr. Eric Gan did not
participate in the discussion or vote at the meeting of the board of directors
of eAccess, since there are concerns that they have special interests in the
execution of the Agreement in view of the relationship with eAccess
shareholders.
5. Outline of Parties to Share Exchange
Sole parent company upon A wholly-owned subsidiary
share exchange upon share exchange
(1) Name SOFTBANK CORP. eAccess Ltd.
(2) Address 1-9-1 Higashi-Shimbashi, 10-1, Toranomon 2-chome
Minato-ku, Tokyo Minato-ku, Tokyo
(3) Name and title Mr. Masayoshi Son, Chairman Dr. Sachio Semmoto,
of representative and CEO Representative Director &
Chairman
(4) Business Pure holding company Broadband IP Communication
description Service
(5) Paid-in capital JPY 213,797 million JPY 18,500 million
(6) Founded September 3, 1981 November 1, 1999
(7) Shares issued 1,107,728,781shares 3,465,180 shares
(8) Financial close March 31 March 31
(9) Number of Consolidated: 22,710 Consolidated: －
employees
Standalone: 175 Standalone: 1,196
(as of March 31,
2012)
(10) Main suppliers Apple, Ericsson, Sharp Huawei Technologies Japan
K.K, Ericsson Japan
(11) Main financing Mizuho Corporate Bank, Ltd. Mizuho Bank, Ltd.
banks
(12) Principal Masayoshi Son 20.92% GS TK Holdings III GK
shareholders and 25.30%
percentage Japan Trustee Services Bank,
Ltd. 8.97% MLPFS Custody Account
(as of March 31,
2012) JP Morgan Chase Bank 380055 6.09%
5.55%
GS TK Holdings I GK
The Master Trust Bank of 4.56%
Japan, Ltd. 4.21%
Nomura International Hong
State Street Bank and Trust Kong Limited
Company 2.86% (F5-108)
Trust & Custody Services
Bank, Ltd. 2.02% 3.21%
State Street Bank and Trust
Company 3.01%
(13) Capital N/A
Relationship between relationship
SOFTBANK and eAccess Personnel N/A
relationship
Business SOFTBANK MOBILE uses highspeed data
relationship communication network of eAccess as MVNO
(mobile virtual network operator).
Status as a N/A
Related Party
(14) Financial results of past 3 years
SOFTBANK CORP. (consolidated) eAccess Ltd.
Financial March March March March 2010 March March 2012
close 2010 2011 2012 (consolidated) 2011(*) (standalone)
Sales 2,763,406 3,004,640 3,202,435 83,067 181,541 204,743
EBITDA 787,630 930,729 1,013,716 26,555 58,249 62,504
Operating 465,871 629,163 675,283 19,151 14,967 24,441
income
Ordinary 340,997 520,414 573,651 10,828 5,088 12,184
income
Net income 96,716 189,712 313,752 4,148 14,565 15,156
Net asset 963,971 879,618 1,435,640 13,155 - 86,371
Total asset 4,462,875 4,655,725 4,899,705 86,864 - 352,312
Net asset 434.74 572.14 852.69 6,981.37 - 24,190.80
per share
(JPY)
Net income 89.39 175.28 285.78 2,762.06 4,765.51 4,320.98
per share
(JPY)
Dividend per 5.00 5.00 40.00 2,400 2,400 800
share (JPY)
(common
share)
(Unit: JPY million (excluding net asset per share, net incomer per share and
dividend per share)
Note: eAccess conducted a share exchange whereby EMOBILE Ltd. became the
wholly owned subsidiary of eAccess effective as of July 1, 2010, and then
eAccess merged with EMOBILE Ltd. so that eAccess had no consolidated
subsidiary and did not make the consolidated balance sheet. Accordingly, it
does not state "net asset", "total asset" or "net asset per share" above for
the fiscal year ending in March 2011. In addition, the figures for the fiscal
year ending in March 2011 described above are calculated by consolidating the
business performance of EMOBILE Ltd. for the period from April 1, 2010 to
March 30, 2011 and that of eAccess for the 9 months period from July 1, 2010
to March 31, 2011.
6. Status after the Share Exchange
Sole Parent Company
(1) Name SOFTBANK CORP.
(2) Address 1-9-1 Higashi-Shimbashi, Minato-ku, Tokyo
(3) Name and title of representative Masayoshi Son, Chairman & CEO
(4) Business description Pure holding company
(5) Paid-in capital Not determined at this moment.
(6) Financial close March 31
(7) Net asset Not determined at this moment.
(8) Total asset Not determined at this moment.
7. Outline of accounting treatment
The Share Exchange is expected to be treated as an "acquisition" under the
Japanese Accounting Standards for Business Combinations. Goodwill resulting
from the Share Exchange is therefore expected, but the value is yet to be
determined.
8. Future outlook
We will announce the specific dates for the procedures of the Share Exchange
and the impact of the Share Exchange on the financial results once they are
fixed.
9. Business alliance
SOFTBANK MOBILE, a subsidiary of SOFTBANK, and eAccess reached a framework
agreement of the Business Alliance today. SOFTBANK MOBILE will provide
eAccess with 900 MHz and 2.1 GHz network, and eAccess will provide SOFTBANK
MOBILE with 1.7 GHz FDD LTE network. Usage charge of network, and other terms
and conditions of the Business Alliance are to be determined after the
discussion by both companies, and the impacts on the financial results to both
companies are yet to be determined.
(Reference) Financial result forecast and actual of the previous period
(1) SOFTBANK (consolidated)
(JPY million)
Sales Operating income Ordinary income Net income
Forecast - - - -
(ending March 2013)
Actual 3,202,435 675,283 573,651 313,752
(ended March 2012)
The SOFTBANK Group continues to focus on network expansion and customer
acquisition of the mobile communications business for the fiscal year ending
March 2013. Such efforts will cause an increase in cost, however with a steady
increase in customer base, it is expected that sales and operating income will
exceed the level of the fiscal year ended March 2012, and operating income
will exceed JPY 700 billion.
(2) eAccess (standalone)
(JPY million)
Sales Operating income Ordinary income Net income
Forecast 250,000 26,000 15,000 13,500
(ending March 2013)
Actual 204,743 24,441 12,184 15,156
(ended March 2012)
Exhibit 1
The Overview of the Financial Analyses
Regarding the Stock Exchange Ratio by the Respective Financial Advisors
1. The Overview of the Financial Analyses by Financial Advisor of SoftBank
(1) Mizuho Securities Co., Ltd.
Mizuho Securities Co., Ltd. ("Mizuho Securities") performed Analysis of
Historical Share Prices to calculate the price range of the common stock of
Softbank since it is listed in a stock exchange and has a market price with
abundant liquidity due to its large-sized market capitalization. In performing
Analysis of Historical Share Prices, Mizuho Securities reviewed 1) the closing
stock price on September 28, 2012 (the "Record date"); 2) the average closing
stock price during the month before the Record Date; 3) the average closing
stock price during the three months before the Record Date; and 4) the average
closing stock price during the six months before the Record Date.
Mizuho Securities performed Analysis of Historical Share Prices, Comparable
Companies Analysis, and Discounted Cash Flow Analysis to calculate the price
range of the common stock of eAccess. In performing Analysis of Historical
Share Prices, Mizuho Securities reviewed 1) the closing stock price on
September 28, 2012 (the "Record date"); 2) the average closing stock price
during the month before the Record Date; 3) the average closing stock price
during the three months before the Record Date; and 4) the average closing
stock price during the six months before the Record Date. The financial
projections (included the profit plan) with which Mizuho Securities performed
Discounted Cash Flow Analysis, includes some fiscal years with a significant
increase in profit mainly due to sales unit increase generated by strengthened
sales forces and cost reduction through the shared use of backborn networks.
The calculated ranges of the exchange ratio based on each method are as shown
below. The calculated ranges of exchange ratio show the range of the number of
shares of Softbank's common stock that are to be allotted for one share of the
common stock of eAccess.
Analysis Method Calculated Range of Exchange Ratio
Analysis of Historical Price 4.72 － 5.27
Comparable Companies Analysis 2.57 － 6.65
Discounted Cash Flow Analysis 15.55 － 22.71
Mizuho Securities has used the information provided by Softbank, in addition
to publicly available information, to conduct its analysis. Mizuho Securities
has not conducted any independent verification of the accuracy or completeness
of this information, but rather has assumed that all such materials and
information are accurate or complete and that there is no undisclosed
information that would have a significant impact on the exchange ratio
analysis. In addition, Mizuho Securities has not made any independent
evaluation or assessment of the assets or liabilities (including contingent
liabilities) of either party, their subsidiaries or their affiliates, nor has
Mizuho Securities independently analyzed or assessed each individual asset or
liability. Mizuho Securities calculated the exchange ratio based on
information and economic conditions up to and as of September 28, 2012, and
Mizuho Securities assumes that the financial projections (including the profit
plan and other information) have been rationally prepared on the basis of the
best possible estimates and judgment currently available.
Mizuho Securities, the financial advisor for Softbank calculating the share
exchange ratio, is not a related party of either Softbank or eAccess, and has
no material interest in the share exchange contemplated in this document.
(2) Plutus Consulting
Plutus Consulting applied the market price standard method in consideration of
the fact that both companies' common shares have a market price, the analysis
of comparable companies and the discounted cash flow (DCF) method for the
common shares of eAccess. The following is the calculation range for the share
exchange ratios obtained from each calculation methodologies, assuming that
the value of one share of Softbank is one.
Calculation Method Range of Calculated Exchange Ratios
Market Price Standard 4.583-5.335
Comparable Companies Analysis 2.728-6.134
DCF method 13.502-19.072
The valuation date was set at September 30, 2012, and the figures used were
the closing prices on the First Section of the Tokyo Stock Exchange on the
valuation date and the average closing prices for the periods one month, three
months and six months before the valuation date.
In calculating the Share Exchange Ratio, Plutus Consulting relied on
information provided by Softbank as well as information generally available to
the public. Plutus Consulting has assumed that all such information and
materials are accurate and complete and has therefore not conducted any
independent investigation to verify the accuracy of such information and
materials. Plutus Consulting has not conducted any analysis or evaluation of
the assets and liabilities of the parties or their related parties (including
off-balance sheet assets and liabilities, and other contingent liabilities)
and has not conducted, nor requested any third-party financial institution to
conduct, any independent valuation or appraisal of such assets and
liabilities. Further, Plutus Consulting worked under the assumption that the
financial forecast provided by Softbank was produced in a reasonable manner
using the best available information and judgment at the times the forecast
was made. The Share Exchange Ratio calculation provided by Plutus Consulting
is based on such information provided as of September 30, 2012.
It is noted that the financial plan provided by Softbank to Plutus Consulting
as the basis of calculations in connection with the DCF method, fiscal years
with significant increases in profit are included. This is mainly due to sales
unit increase generated by strengthened sales forces and cost reduction
through the shared use of backborn networks.
2. The Overview of the Financial Analyses by Financial Advisor of eAccess
Goldman Sachs, as part of the process of preparing its written opinion
referred to in Item 4.5 (Measures to Ensure Fairness), performed a historical
stock price analysis, comparable companies analysis, and discounted cash flow
("DCF") analyses, which DCF analyses were based upon publicly available
information and financial projections for eAccess prepared by eAccess'
management, as approved for Goldman Sachs' use by eAccess, and a range of
perpetuity growth rates or multiples. The results of the respective analyses
are shown below. The below ranges of the stock exchange ratio are for a number
of shares of common stock of SoftBank ("SoftBank Shares") to be issued in
exchange for one share of eAccess common stock ("eAccess Share"). In
performing the stock price analysis, Goldman Sachs used September 28, 2012 as
the base date, and reviewed the high and low closing market prices of eAccess
during the 52-week period ending on the base date as a basis for the analysis.
No fiscal year in the financial projections for eAccess used in the DCF
analyses assumes any significant increase or decrease in profits. No company
used in the comparable companies analysis as a comparison is directly
comparable to eAccess.
Goldman Sachs provided its advisory services and the opinion for the
information and assistance of the Board of Directors of eAccess in connection
with its consideration of the transaction contemplated by the Stock Exchange
Agreement (the "Transaction") and such opinion does not constitute a
recommendation as to how any holder of eAccess should vote with respect to the
Transaction or any other matter. Goldman Sachs did not recommend any specific
stock exchange ratio to eAccess or its Board of Directors or that any specific
stock exchange ratio constituted the only appropriate stock exchange ratio.
The opinion was approved by a fairness committee of Goldman Sachs and its
affiliates. Please refer to Note 1 below which sets forth in more detail, the
assumptions made, procedures followed, matters considered and limitations on
the review undertaken.
Methodology Range of the stock exchange ratio
Stock Price Analysis 3.92 ～ 7.07
Comparable Companies Analysis 0.22 ～ 16.87
DCF Analysis (perpetuity growth rates) 6.42 ～ 15.60
DCF Analysis (multiples) 7.10 ～ 18.01
Goldman Sachs also prepared an accretion/dilution analysis. Goldman Sachs
reviewed and considered such analyses as a whole in preparing its opinion and
did not attribute any particular weight to any factor or analysis considered
by it. Goldman Sachs' analyses and opinion are necessarily based on economic,
monetary, market and other conditions as in effect on, and the information
made available to Goldman Sachs as of October 1, 2012, and Goldman Sachs
assumes no responsibility for updating, revising or reaffirming its opinion or
analyses based on circumstances, developments or events occurring after such
date. Goldman Sachs assumed with eAccess' consent that certain internal
financial analyses and forecasts for eAccess have been reasonably prepared on
a basis reflecting the best currently available estimates and judgments of the
management of eAccess. Except as otherwise noted, the quantitative information
used in Goldman Sachs' financial analyses, to the extent it is based on market
data, is based on market data as it existed on or before September 28, 2012
and is not necessarily indicative of current market conditions.
(Note 1) Goldman Sachs and its affiliates (for the purposes of this note,
collectively, "Goldman Sachs") are engaged in commercial and investment
banking and financial advisory services, market making and trading, research
and investment management (both public and private investing), principal
investment, financial planning, benefits counseling, risk management, hedging,
financing, brokerage activities and other financial and non-financial
activities and services for various persons and entities. Goldman Sachs, and
funds or other entities in which they invest or with which they co-invest, may
at any time purchase, sell, hold or vote long or short positions and
investments in securities, derivatives, loans, commodities, currencies, credit
default swaps and other financial instruments of eAccess, Softbank, any of
their respective affiliates and third parties, or any currency or commodity
that may be involved in the transaction contemplated by the Agreement (the
"Transaction") for the accounts of Goldman Sachs and their customers. Goldman
Sachs has acted as financial advisor to eAccess in connection with, and have
participated in certain of the negotiations leading to, the Transaction.
Goldman Sachs expects to receive fees for its services in connection with the
Transaction, the principal portion of which is contingent upon consummation of
the Transaction, and eAccess has agreed to reimburse Goldman Sachs' expenses
arising, and indemnify it against certain liabilities that may arise, out of
its engagement. Goldman Sachs has provided certain investment banking services
to eAccess and its affiliates from time to time for which Goldman Sachs'
Investment Banking Division has received, and may receive, compensation,
including having acted as structuring agent with respect to the refinancing of
a ¥178,800,000,000 senior credit facility of eMobile, a wholly owned
subsidiary of eAccess, in March 2011 and co-manager of an offering of
eAccess's 8.250 percent senior notes due 2018 (aggregate principal amount of
$420,000,000) and 8.375 percent senior notes due 2018 (aggregate principal
amount of €200,000,000), in March 2011. Goldman Sachs has also provided
certain investment banking services to Softbank and its affiliates from time
to time. It may also in the future provide investment banking services to
eAccess, Softbank and their respective affiliates for which Goldman Sachs'
Investment Banking Division may receive compensation. In addition, certain of
Goldman Sachs' affiliates hold an aggregate of 1,057,168 eAccess Shares
(representing approximately 30.5 percent of the issued and outstanding eAccess
Shares), an officer of Goldman Sachs is a member of eAccess's Board of
Directors and an officer of Goldman Sachs is a member of Softbank's Board of
Directors.
In connection with this opinion, Goldman Sachs has reviewed, among other
things, the Agreement; the Annual Securities Reports (Yuka Shoken Houkoku-Sho)
and Annual Reports to Stockholders of each of eAccess and Softbank for the
five fiscal years ended March 31, 2012; certain interim reports to
stockholders and the Semi-Annual Reports (Shihanki Houkoku-Sho) of eAccess and
Softbank; certain other communications from eAccess and Softbank to their
respective stockholders; certain publicly available research analyst reports
for Softbank, as approved for Goldman Sachs' use by eAccess (the "Softbank
Analyst Reports"); certain publicly available research analyst reports for
eAccess; and certain internal financial analyses and forecasts for eAccess
prepared by its management, as approved for use by eAccess (the "Forecasts").
Goldman Sachs has also held discussions with members of the senior management
of eAccess regarding their assessment of the strategic rationale for, and the
potential benefits of, the Transaction and the past and current business
operations, financial condition and future prospects of eAccess and with
members of senior management of Softbank regarding their assessment of the
current business operations, financial condition and future prospects of
Softbank and the Softbank Analyst Reports; reviewed the reported price and
trading activity for the eAccess Shares and Softbank Shares; compared certain
financial and stock market information for eAccess and Softbank with similar
information for certain other companies the securities of which are publicly
traded; reviewed the financial terms of certain recent business combinations
in the mobile and fixed-line telecommunication industries and in other
industries; and performed such other studies and analyses, and considered such
other factors, as Goldman Sachs deemed appropriate.
For purposes of rendering this opinion, Goldman Sachs has, with eAccess's
consent, relied upon and assumed the accuracy and completeness of all of the
financial, legal, regulatory, tax, accounting and other information provided
to, discussed with or reviewed by, Goldman Sachs, without assuming any
responsibility for independent verification thereof. In that regard, Goldman
Sachs has assumed with eAccess's consent that the Forecasts have been
reasonably prepared on a basis reflecting the best currently available
estimates and judgments of the management of eAccess. Goldman Sachs has not
made an independent evaluation or appraisal of the assets and liabilities
(including any contingent, derivative or other off-balance-sheet assets and
liabilities) of eAccess or Softbank or any of their respective subsidiaries
and Goldman Sachs has not been furnished with any such evaluation or
appraisal. Goldman Sachs has assumed that all governmental, regulatory or
other consents and approvals necessary for the consummation of the Transaction
will be obtained without any adverse effect on eAccess or Softbank or on the
expected benefits of the Transaction in any way meaningful to its analysis.
Goldman Sachs also has assumed that the Transaction will be consummated on the
terms set forth in the Agreement, without the waiver or modification of any
term or condition the effect of which would be in any way meaningful to its
analysis.
Goldman Sachs' opinion does not address the underlying business decision of
eAccess to engage in the Transaction, or the relative merits of the
Transaction as compared to any strategic alternatives that may be available to
eAccess; nor does it address any legal, regulatory, tax or accounting matters.
This opinion addresses only the fairness from a financial point of view to the
holders (other than Softbank and its affiliates) of eAccess Shares, as of the
date thereof, of the Exchange Ratio pursuant to the Agreement. Goldman Sachs
does not express any view on, and Goldman Sachs' opinion does not address, any
other term or aspect of the Agreement or Transaction or any term or aspect of
any other agreement or instrument contemplated by the Agreement or entered
into or amended in connection with the Transaction, including, the fairness of
the Transaction to, or any consideration received in connection therewith by,
the holders of any other class of securities, creditors, or other
constituencies of eAccess; nor as to the fairness of the amount or nature of
any compensation to be paid or payable to any of the officers, directors or
employees of eAccess, or class of such persons, in connection with the
Transaction, whether relative to the Exchange Ratio pursuant to the Agreement
or otherwise. Goldman Sachs is not expressing any opinion as to the prices at
which Softbank Shares will trade at any time as to the impact of the
Transaction on the solvency or viability of eAccess or Softbank or the ability
of eAccess or Softbank to pay their respective obligations when they come
due. Goldman Sachs' opinion is necessarily based on economic, monetary,
market and other conditions as in effect on, and the information made
available to us as of, the date thereof and Goldman Sachs assumes no
responsibility for updating, revising or reaffirming this opinion based on
circumstances, developments or events occurring after the date thereof.
Goldman Sachs' advisory services and the opinion expressed therein are
provided for the information and assistance of the Board of Directors of
eAccess in connection with its consideration of the Transaction and such
opinion does not constitute a recommendation as to how any holder of eAccess
Shares should vote with respect to such Transaction or any other matter.
Goldman Sachs' opinion has been approved by a fairness committee of Goldman
Sachs.
Notices Regarding Registration under the U.S. Securities Act of 1933
SOFTBANK CORP. ("SoftBank") may file a registration statement on Form F-4
("Form F-4") with the U.S. Securities and Exchange Commission ("SEC") in
connection with the proposed share exchange between SoftBank and eAccess Ltd.
(the "Share Exchange"). The Form F-4 for the Share Exchange, if filed, will
contain a prospectus and other documents. If a Form F-4 is filed and declared
effective, the prospectus contained in the Form F-4 will be mailed to U.S.
shareholders of the subject company (eAccess Ltd.) prior to the shareholders'
meeting at which the relevant proposed share exchange will be voted upon. The
Form F-4 and prospectus, if filed, will contain important information about
the subject company and SoftBank, the Share Exchange and related matters. U.S.
shareholders of the subject company are urged to read the Form F-4, the
prospectus and other documents that may be filed with the SEC in connection
with the Share Exchange carefully before they make any decision at the
shareholders' meeting with respect to the Share Exchange. Any documents filed
with the SEC in connection with the proposed Share Exchange will be made
available when filed, free of charge, on the SEC's web site at www.sec.gov. In
addition, the documents filed with the SEC in connection with the share
exchange will be made available to shareholders upon request, free of charge,
by calling, writing or e-mailing Softbank at: 81.3.6889.2290, 1-9-1
Higashi-Shimbashi, Minato-ku, Tokyo 105-7303, Japan, or ir@softbank.co.jp.
Notices Regarding Forward-Looking Statements
This press release includes forward-looking statements (within the meaning of
Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S.
Securities Exchange Act of 1934) about SoftBank and its group companies (the
"SoftBank Group"). To the extent that statements in this press release do not
relate to historical or current facts, they constitute forward-looking
statements. These forward-looking statements are based on the current
assumptions and beliefs of the SoftBank Group in light of the information
currently available to it, and involve known and unknown risks, uncertainties
and other factors. Such risks, uncertainties and other factors may cause the
SoftBank Group's actual results, performance, achievements or financial
position to be materially different from any future results, performance,
achievements or financial position expressed or implied by these
forward-looking statements. SoftBank undertakes no obligation to publicly
update any forward-looking statements after the date of this press release.
This information is provided by RNS
The company news service from the London Stock Exchange
END
STRUGGGPUUPPUMA -0- Oct/05/2012 07:32 GMT
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