Billionaire Son on Buying Spree as SoftBank Chases Growth

A day after SoftBank Corp. said it was buying a majority stake in gamemaker Supercell Oy, billionaire Chairman Masayoshi Son is at it again.

Japan’s third-largest wireless carrier is in talks to buy a stake in Brightstar Corp., a U.S.-based mobile-phone distributor, the company said in a filing to the Tokyo Stock Exchange. The Nikkei newspaper earlier reported the deal could be worth more than 100 billion yen ($1 billion).

SoftBank has been involved in at least 12 deals in the past year, topped by its $21.6 billion acquisition of Sprint Corp., as it expands in North America and Europe to counter a declining population at home. SoftBank yesterday agreed to buy a 51 percent stake in Finland-based Supercell, adding to a stable of investments in more than 1,000 Internet companies, including Alibaba Group Holding Ltd. and Yahoo Japan Corp.

“Mr. Son has said entering the U.S. carrier market was his dream, but his dream seems endless,” said Yuuki Sakurai, chief executive officer of Fukoku Capital Management Inc. “Where does he plan to stop?”

Brightstar distributes mobile phones, provides handset insurance and financial services with operations in about 50 countries, according to its website. No decision has been made on the acquisition, according to the SoftBank filing. Brightstar Chairman Marcelo Claure said in an e-mail that the company doesn’t comment on rumors.

Value Chain

If SoftBank and Sprint controlled Brightstar, it might create a conflict with the other U.S. carriers, said Jan Dawson, chief telecommunications analyst in the New York office of London-based Ovum.

“The challenge for international M&A has always been how to drive synergies between the two businesses, and scale in handsets is one way to do that,” Dawson said. “Gaining control of Brightstar would boost that even more, so it makes sense in principle. But if other carriers abandon Brightstar over time the value would quickly dwindle.”

Brightstar won’t be negatively affected if SoftBank acquires a stake because the Japanese carrier would generate business from its customers in Asia and its controlling stake in U.S. operator Sprint, said Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co.

“It’s a strategy to gain profit from the value chain,” said Aoki. “SoftBank is attempting to enlarge its profit through procurement and logistics.”

‘Improve Margins’

SoftBank may see this as a good way to invest in the expansion of the U.S. wireless industry, said Avi Greengart, an analyst at Current Analysis who is based in Teaneck, New Jersey.

“They might see it as a way to improve margins by owning the middle man,” Greengart said.

SoftBank yesterday agreed to pay $1.53 billion for the majority stake in Supercell, the developer of games including “Clash of Clans” and “Hay Day,” in a bid by the carrier to capitalize on booming demand for titles played on mobile phones.

“Expanding its content business fits SoftBank’s growth strategy and the company will likely continue expanding operations outside the telecom arena,” Satoru Kikuchi, an analyst at SMBC Nikko Securities Inc. in Tokyo, said in report to clients.

SoftBank invested $20 million in more than a decade ago. Its investment in Alibaba Group could be worth more than 1,000 times that if the Chinese e-commerce operator proceeds with an initial public offering. Analysts estimate Alibaba may be worth as much as $120 billion.

The Japanese carrier invested $150 million in 2010 to acquire a stake in game developer Zynga Inc.

Earnings Outlook

Son is Japan’s second-richest man, with an estimated net worth of $13.5 billion according to the Bloomberg Billionaires Index. He is forecasting record domestic earnings this year for SoftBank as new subscribers are added more quickly and the Sprint deal saves $2 billion annually by pooling purchases of handsets and network equipment.

“Waking up in the morning is fun as long as there’s a dream,” according to a posting on Son’s Twitter account late yesterday.

SoftBank rose 2.2 percent to 7,400 yen at the close in Tokyo. The shares have more than doubled this year while Japan’s benchmark Topix index has added 39 percent.