Line Climbs After Deal to Boost Stake in Snapchat Clone SnowBy
Combined photo business will include Snow and B612 apps
Shares climb the most in five months in Tokyo trading
Line Corp. jumped the most in five months after Japan’s biggest instant messaging service said it will combine its photo app operations and boost a stake in a popular Snapchat clone.
The stock rose as much as 5.6 percent to 3,790 yen in Tokyo on Friday, the biggest intraday jump since Sept. 28. Line said it will increase its stake in Snow, a Snapchat-like service popular in Asia, to 48.6 percent from 25 percent and hand over its camera operations including B612 selfie app in exchange for the shares. Line’s parent Naver Corp. currently owns 75 percent of Snow.
Snow has captured younger fans in South Korea, Japan and China, while B612’s user base covers Vietnam, Indonesia and Latin America and combining the two will make the photo app business more competitive globally, Line said. Both have ranked in the top 100 most downloaded photo apps in the U.S. in the past five months, according to App Annie. That’s a market where they compete against U.S.-based Snap Inc., which is in the process of an initial public offering that values the company at as much as $18.5 billion.
Line said it is still determining the impact of the reorganization on earnings and aims to complete the deal in May.