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MarketScreener Homepage  >  Equities  >  KOREA EXCHANGE  >  Naver Corp    A035420   KR7035420009

NAVER CORP

(A035420)
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SoftBank's Yahoo Japan in merger talks with Line, shares jump

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11/14/2019 | 05:29am EST
Logo of Line Corp is seen at the company's headquarters in Tokyo

SoftBank's Yahoo Japan is in talks to merge with messaging app operator Line Corp to create a $27 billion tech giant and help the Japanese conglomerate expand e-commerce and payments services.

Yahoo Japan, which last month changed its name to Z Holdings, said on Thursday discussions were underway with Line but nothing had been decided. SoftBank Corp, which owns almost half of Z Holdings, also acknowledged the talks.

Shares in Z Holdings, which had a stock market value of about $17 billion at Wednesday's close, jumped 17%. Shares in Line, which is valued at about $10 billion, closed up 15%.

Sources told Reuters on Wednesday a deal was likely by month-end and could see SoftBank Corp and Line's parent Naver Corp form a 50/50 venture that would control Z Holdings, which would in turn operate Line and Yahoo.

Line said in a statement it was considering ways to improve its corporate value but nothing had been decided.

A deal would bring together the operators of two of Japan's biggest QR code payment apps, as the country belatedly shifts to cashless payments. SoftBank's PayPay recently hit 19 million users through aggressive marketing, while Line Pay can tap the 82 million Japanese users of the Line app.

Those services are money-losing, with Line - which last year sold a majority stake in its mobile unit to SoftBank - reporting three consecutive quarters of operating losses as it tries to jump-start growth.

While the two companies combined revenues would exceed rival Rakuten Inc, whose shares fell 6% on the news, their combined transaction value would still be dwarfed by Rakuten, Goldman Sachs analyst Masaru Sugiyama wrote in a note.

SoftBank is making a major push into online retailing, launching PayPay Mall, as it tries to grow revenues outside its core telecoms business.

Seperately on Thursday, Z Holdings said it had acquired 50.1% of fashion e-tailer Zozo Inc in a $3.7 billion deal announced in September, as it bulks up against rivals such as Amazon.com.

The deal leaves Zozo founder and former CEO Yusaku Maezawa as the second largest shareholder with an 18% stake.

Dealmaking by SoftBank Corp, controlled by tech conglomerate SoftBank Group Corp, comes despite the weak performance of the technology bets of its parent, which recorded an $8.9 billion operating loss in the second quarter.

The group's first quarterly loss in 14 years followed a collapse in the value of its investment in office-sharing firm WeWork as investors have turned sceptical about the path to profitability at cash-burning startups.

By Sam Nussey and Chris Gallagher

Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM 0.03% 1760.94 Delayed Quote.17.24%
LINE CORPORATION -0.95% 5220 End-of-day quote.40.89%
NAVER CORP End-of-day quote.
RAKUTEN, INC. 0.21% 933 End-of-day quote.30.86%
SOFTBANK CORP End-of-day quote.
Z HOLDINGS CORPORATION 3.62% 401 End-of-day quote.50.75%
ZOZO, INC. 0.14% 2101 End-of-day quote.6.33%
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Financials (KRW)
Sales 2019 6 597 B
EBIT 2019 788 B
Net income 2019 493 B
Finance 2019 2 803 B
Yield 2019 0,18%
P/E ratio 2019 57,7x
P/E ratio 2020 35,4x
EV / Sales2019 3 869x
EV / Sales2020 3 352x
Capitalization 25 526 B
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 29
Average target price 206 000,00  KRW
Last Close Price 175 500,00  KRW
Spread / Highest target 37,9%
Spread / Average Target 17,4%
Spread / Lowest Target -14,5%
EPS Revisions
Managers
NameTitle
Seong-Sook Han Chief Executive Officer & Director
In-Hyeok Choi Chief Operating Officer & Director
Sang-Jin Park Chief Financial Officer
Yu-Hoon Kang Head-Technology
Hae-Jin Lee Director & Global Investment Officer
Sector and Competitors
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BAIDU, INC.-24.88%41 282
Z HOLDINGS CORPORATION50.75%17 487
YANDEX58.14%14 216
SOGOU INC.-5.71%1 937