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Japan's broadcaster faces fresh buyout pressure

Posted by iTech - 2005-10-15

TOKYO (AFP) - Major Japanese broadcaster TBS, already studying a merger offer from the country's top online shopping mall Rakuten, said it has now received a management buyout proposal from one of its investors.
Tokyo Broadcasting System said that it was studying the proposal from an investment fund operated by former trade ministry bureaucrat Yoshiaki Murakami.

The private broadcasting network added that it had learned that Muramaki's fund, formally called MAC Asset Management, had a 7.45-percent stake in TBS as of the end of September.

The announcement came the day after Rakuten Inc. shocked Japan's broadcasting industry by making public that it was proposing to merge its operations with TBS under a joint holding company.

Rakuten, which offers on-line shopping, travel, auctions and financial services, also announced it had become TBS's top shareholder by securing a 15.46 per-cent stake for 88 billion yen (767 million dollars).

Rakuten president Hiroshi Mikitani, who has been aggressively buying firms and set up a rare new professional baseball club, has already expressed his readiness to combine traditional television broadcasting with the Internet.

But TBS gave a cautious initial response to the offer.

Although Mikitani denied having any links to Murakami's fund, speculation was rife in the media that the two parties were in close contact over TBS shares.

Kyodo News, quoting market sources, said Murakami seems to have proposed that TBS buy back its own shares through a management buyout scheme and utilize its real estate and other assets more effectively to raise its corporate value.

TBS owns significant property in an upscale district of Akasaka, located in the centre of Tokyo.

The share-holding upheaval in the TV industry followed a fierce bid earlier this year by Livedoor, the Internet start-up of a brash young entrepreneur, to take over Fuji Television, the nation's most watched network.

Experts say the broadcasting industry, which has long been protected by media law, is faced with growing pressure from Internet companies seeking to enter the prestigious television business.

Livedoor, headed by 32-year-old entrepreneur Takafumi Horie, gave up the takeover efforts but won a deal including tie-ups between the two firms and raised some 44 billion yen through sales of shares in Fuji television and its affiliates to the broadcaster.

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