Softbank (SFTB.Y -2.20%), the Japanese technology company gearing up to raise $41 billion by selling assets, has some of its stake in Alibaba (BABA -3.78%) in its sights.
Citing people with knowledge of the matter, Bloomberg reported Softbank intends to sell around $14 billion of its shares in Alibaba, the Chinese eCommerce giant. Sources said Softbank can raise anywhere from $12 billion to $15 billion selling some of its $120 billion stake. It’s not clear over what period Softbank will sell shares of Alibaba.
IMAGE SOURCE: GETTY IMAGES.
To raise the remaining billions, Softbank is also mulling selling its stake in SoftBank Corp.'s telecommunications business in Japan, and part of its holdings in Sprint (S) once the merger with T-Mobile US (TMUS -1.96%) is complete. Combined, Jefferies Group estimates the stakes are valued at $190 billion.
On Monday Softbank surprised investors by announcing a $41 billion plan to unload assets to reduce its debt and buy back shares. As part of the initiative, Softbank committed to buying $18 billion in stock back. Softbank didn’t say what assets it plans to unload but said the actions will enable the technology company to “strengthen our balance sheet” and “significantly” lower its debt load.
The move comes as Softbank has faced pressure from investors including Elliott Management, which has recently amassed a sizable stake in the Japanese company. Investors aren't happy with its recent tech investments that have resulted in losses for its Vision Fund, which aims to identify the tech leaders of the future. The $18 billion stock buyback program is in addition to the $4.8 billion in stock it announced last week it was repurchasing.
Shares of Softbank have been gaining since its asset sale announcement. They were recently up more than 12%.
