KDDI’s J:COM deal could be hit with USD884m fine

2 Feb 2010

KDDI of Japan’s bid to buy into fellow telco Jupiter Telecommunications (J:COM) has hit an obstacle with the news that financial regulators are investigating the legality of the plan and could slap an USD884 million fine on the telecom firm, the Yomiuri daily reports. Lawyers have raised a question that, as the purchase would give KDDI a one-third stake in J:COM and make it its biggest single shareholder, it needs to make a public tender offer for the shares and seek shareholder approval. KDDI spokeswoman Kayo Sekine is quoted as saying: ‘We will cooperate if the FSA should make a formal request for information and adhere to any FSA guidance,’ although she declined to comment on the rumoured USD884 million fine.

Earlier this month, CommsUpdate reported that KDDI Corp had struck a deal to acquire a 38% stake in local cable TV operator J:COM from Liberty Global Inc in a USD4 billion cash deal that will give KDDI more new subscribers and access to a fibre network. The deal struck is equivalent to a premium of 44% on Jupiter’s closing share price at the time of the announcement. KDDI’s investment will give it access to a potential 3.2 million households for telephony services and simultaneously reduce its reliance of using NTT’s fibre-optic networks, said KDDI president Tadashi Onodera.

Japan, KDDI (au)