This is big: Japanese telecommunications giant SoftBank (the one that acquired Sprint in the US) will launch a tender offer to increase its stake in GungHo Online Entertainment between April 1 and 26 this year (GungHo will conduct a 10-for-1 share split on April 1).
GungHo has produced Puzzle & Dragons, Japan’s most popular smartphone game (over 10 million users) and perhaps the most profitable mobile game worldwide (estimated to rack in well over US$50 million per month currently).
A few days ago, GungHo’s market cap reached a mind-blowing US$5 billion – more than that of GREE or Mobage operator DeNA.
SoftBank (or SoftBank Mobile, to be more specific) will acquire 6.4% of GungHo’s total shares for 25 billion yen (US$264 million).
With that investment, the telco’s stake in the Puzzle & Dragons maker increases from 33.6% to 58.5%.
SoftBank explains:
With this understanding, the Company recognized the importance of enhancing mobile content by combining smartphone-focused development capability and infrastructure held by the SoftBank Mobile Group and planning and creating capability in the smartphone game industry held by the Target Company Group to further improve the efficiency in operation of the mobile communications business, profitability and competitiveness.
After the execution of the deal, GungHo will become a SoftBank subsidiary.
SoftBank acquires the shares from a company called Asian Grooves, which is owned by Taizo Son – who is the brother of SoftBank CEO and founder Masayoshi Son (Taizo Son is also Chairman at GungHo).
