June 18, 2018

Softbank in talks to acquire minority stake in Swiss Re

11 February 2018, 04:15 | Melvin Schneider

Japan's Soft Bank prepares listing of mobile unit

Japan's Soft Bank prepares listing of mobile unit

The reinsurance giant said in a press release, "Swiss Re informs that it is engaged in preliminary discussions with SoftBank Group Corp".

The Zurich-based company declined to comment further.

The reinsurer gained as much as 6.8 percent in Zurich on Thursday, the highest intraday rise since November 2011, and was trading 4.2 percent higher at 11:29 a.m. local time. A spokesman for SoftBank didn't immediately respond to requests for comment.

The reinsurer's shares closed at 90.18 Swiss francs on Wednesday.

If Swiss Re were to agree to SoftBank's approach, it has the capacity to issue up to 135 million new shares without seeking approval from existing shareholders, who could potentially be blocked from buying the first 70 million new shares, according to the company's articles of association.

Softbank is looking to purchase up to a third of Swiss Re's shares at a premium, the Journal reported.

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SoftBank, which has raised $93 billion of its planned $100 billion Vision Fund, has taken stakes in businesses including ride-hailing, chipmaking, office-sharing, satellite-building, robot-making, even indoor kale-farming.

A significant investment in one of the world's largest reinsurance firms would mark a departure from recent moves, but analysts said that Swiss Re is an attractive target because of its reliable strong cash flow and revered performance record.

The news follows SoftBank's announcement on Wednesday that it was preparing to list its domestic telecoms unit, raising further funds that could be used to shore up its finances or make more investments.

Swiss Re's top management recently visited Japan and met with SoftBank Chairman and CEO Masayoshi Son, the report said.

The purchase of a stake in Swiss Re would be the latest in a constant stream of investments that have made valuing SoftBank hard and left a "conglomerate discount" weighing on its share price.

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