Elliott Pushes SoftBank Buyback After Taking Stake, FT Says

(Bloomberg) — Elliott Management has built a sizeable stake in SoftBank Group Corp. and is pushing the Japanese investment firm to launch a $15 billion buyback, the Financial Times reported, citing people familiar with the matter.

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The US activist investor has amassed a stake worth more than $2 billion and engaged with SoftBank executives in recent months, the FT said. Elliott is arguing that a share repurchase of that magnitude would help founder Masayoshi Son signal to the market his confidence in SoftBank. Its shares rose 4.6% in Tokyo.

It’s the second time Paul Singer’s firm has targeted SoftBank, once among the world’s biggest and most influential tech investors. Elliott had accumulated a roughly $3 billion stake in 2020, after which SoftBank sharply ramped up its pace of buybacks. Elliott later sold down much of its stake in the Tokyo-based company.

A representative of SoftBank declined to comment. A representative of Elliott did not immediately respond to a request for comment.

SoftBank has cut back on startup bets in recent years. It’s now preparing to get more aggressive in investments in AI and other fields, after a surge in the value of key assets including Arm Holdings Plc.

“That headline number of $15 billion in buybacks will pull a lot of fast-money buyers in,” said Andrew Jackson, head of Japan equity strategy at Ortus Advisors Pte. “They clearly mean business so this has the potential to gain traction.”

Elliott is taking aim at SoftBank in part because of a wide gap between the firm’s market value and the net worth of its assets — something Son himself has repeatedly pointed out to argue that the company’s shares are undervalued. London-based senior portfolio manager Nabeel Bhanji, who has been instrumental in guiding Elliott’s investments in Tokyo, is managing the firm’s position, the FT reported.

Son is aiming to go on the offensive again after years of missteps at the Vision Fund, the investment group he set up to bet billions of dollars on startups. The fund is now steadily selling off and writing down assets in its portfolio as Son turns his focus to AI and semiconductors. SoftBank has accumulated a cash pile of ¥6.2 trillion at the end of March.

Still, the company has plans for some of that capital. Son is seeking as much as $100 billion to bankroll a chip venture to compete with Nvidia Corp. and supply semiconductors essential for AI, Bloomberg News reported in February. The Japanese firm is also in talks to acquire British semiconductor startup Graphcore Ltd., Bloomberg reported.

–With assistance from Winnie Hsu.

(Updates with companies’ comments and details on Elliott’s previous thrust from the second paragraph)

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