Japanese cable broadcaster Usen said yesterday it may make scandal-hit Livedoor a wholly owned unit - a move that would end a chapter in the story of the internet firm that shook Japan's business world.
The Mainichi Shimbun reported Usen may absorb Livedoor through a share swap and divide the company in two: a business division and a division to manage its assets to counter lawsuits against Livedoor.
A spokeswoman for Usen confirmed that turning Livedoor into a wholly-owned subsidiary was one option it was considering.
Usen's president Yasuhide Uno gave Livedoor a much-needed lifeline last month when he agreed to buy a 12.7 per cent stake in Livedoor from TV company Fuji Television Network.
The firms have already linked Livedoor's 15 million portal users to Usen's free video content delivery portal. Analysts say the two companies have areas that tie in well and the deal is probably good for Livedoor shareholders in the long term.
"The chances of Livedoor surviving are that much better if someone else is helping out," said Hiroshi Kamide, an analyst at KBC Securities.
Livedoor shares ended trading on Thursday at 94 yen, down 6.9 per cent on their last day before delisting.
At that price, Livedoor's market value stood at some 98.6 billion yen (€687 million) - a far cry from its €5 billion valuation before January 16th, when prosecutors raided the firm.
But analysts caution it is impossible to gauge its real value, given the allegations that the company inflated earnings, and the damage compensation claims could inflict. Its shares will be much more illiquid, and questions also remain as to whether the company can continue to do business as usual.
Usen's shares closed up 1.5 per cent at 2,710 yen. Some foreign funds have also bought into Livedoor with Hong Kong-based Gandhara Master Fund and US-based Scion Funds both holding stakes of over 5 per cent as of February.
Livedoor's former chief, Takafumi Horie, was arrested earlier this year on suspicion of violating securities laws by spreading false information and falsifying the accounts of an affiliate.
Known for his aggressive business tactics and brash manner, Mr Horie turned his young firm into a sprawling internet conglomerate.
He became an icon of a dynamic "New Japan" after a spurned attempt to buy a baseball team in 2004 and a rare takeover battle with the Fuji media group. He even ran for parliament.
And when prosecutors raided Livedoor this January, the Tokyo stock market was roiled to the point where the bourse was forced to limit trading hours. - (Reuters)
