SoftBank CEO Is Eager To Invest in Uber, Lyft -- WSJ

By Mayumi Negishi Features Dow Jones Newswires

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 8, 2017).

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TOKYO -- SoftBank Group Corp. Chief Executive Masayoshi Son expressed eagerness to invest in Uber Technologies Inc. or Lyft Inc. to gain access to the U.S. ride-hailing market after similar investments in Asia.

"We are interested in discussing with Uber. We are also interested in discussing with Lyft," the SoftBank chief said Monday at a news conference, adding that he wasn't sure what form an investment would take. "The U.S. is a very big market, the most important market, so we are definitely very much interested."

Mr. Son, founder and head of the Japanese technology and telecommunications group, has stepped up his already frenetic deal-making pace recently as he approaches his 60th birthday later this week.

He said he was close to a deal involving SoftBank-controlled U.S. wireless operator Sprint Corp. that would trigger consolidation in the U.S. telecom industry.

SoftBank and Sprint are brokering "multiple possibilities," he said. He declined to comment on whether a combination with T-Mobile US Inc. -- which Mr. Son has pursued on and off for years -- was on the table.

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His war chest is generated from solid revenue from SoftBank's telecom operations in Japan, a lucrative early investment in Chinese e-commerce company Alibaba Group Holding Ltd., and $93 billion in committed capital in the SoftBank Vision Fund, which was formed with Saudi government investment.

Already, SoftBank is a big investor in the three largest Asian ride-hailing companies: Singapore's GrabTaxi Holdings Pte., India's Ola and China's Didi Chuxing Technology Co. It has also invested in semiconductors, robotics and other areas relevant to autonomous driving.

The technology "is definitely coming, and when that comes, this ride-sharing business becomes even more important," he said.

An Uber spokeswoman and a Lyft spokesman declined to comment on Mr. Son's remarks.

The Wall Street Journal has reported that SoftBank approached San Francisco-based Uber recently about a multibillion-dollar stake but that the negotiations were preliminary and any deal would likely be on hold until Uber hires a new CEO.

Since the Vision Fund was started in May, SoftBank has announced new investments in companies such as shared office-space provider WeWork Cos., Indian mobile-payments firm Paytm, robotics firm Boston Dynamics, self-driving technology firms Nauto and Brain Corp., and many others.

The biggest deal in dollar terms -- if it happens -- would likely be the one involving Sprint. After buying a controlling stake in Sprint in 2013, Mr. Son said uniting Sprint and T-Mobile was the only way to take on U.S. wireless giants Verizon Communications Inc. and AT&T Inc. in an industry facing mounting capital expenditures. Opposition from Obama administration regulators led him to shelve the deal, but in April he reiterated that a T-Mobile deal was his first choice.

SoftBank is considering making a formal offer to acquire Charter Communications Inc., the U.S.'s second-largest cable firm, The Wall Street Journal reported last month. Last week, Charter said it wasn't interested in buying Sprint.

How much control Sprint and SoftBank would wield in any deal depends on how potential partners value Sprint's spectrum, which Mr. Son has touted as essential for fifth-generation, or 5G, networks. Sprint's market capitalization is roughly one-third of Charter's and less than T-Mobile's.

"When the world goes to 5G, Sprint's spectrum will be extremely valuable, " Mr. Son said. "The telecom industry has not fully recognized its value so far, but I think it does now."

Juggling multiple deals has put Mr. Son on a hectic travel schedule. "Even sleeping seems like a waste of time," he said at a SoftBank gathering last month. At an annual shareholders' meeting in June, Mr. Son had a fever and a cold, prompting shareholders to ask about his health.

At Monday's news conference, he apologized for a sore throat that prevented him from raising his voice and reflected on his accomplishments in his first 60 years.

"Looking back, I have so much to regret. I get so frustrated at my own shortcomings," he said. Mr. Son said he would give himself a score of 28 out of 100. "But this is not the end," he said.

The Vision Fund, which is consolidated in SoftBank earnings, generated Yen105.2 billion in income in the quarter ended in June, erased by unrealized investment losses, for a net loss of Yen1.6 billion before interest, taxes, depreciation and amortization.

The company logged a 98% fall in quarterly net profit to Yen5.5 billion, its gains in its telecom operations in the U.S. and in Japan negated by losses on derivatives related to its sale of some of its Alibaba shares last year to finance its acquisition of British chip designer ARM Holdings Inc.

Write to Mayumi Negishi at mayumi.negishi@wsj.com

(END) Dow Jones Newswires

August 08, 2017 02:47 ET (06:47 GMT)