SoftBank Group Corp has announced that its Board of Directors has approved the sale or monetization of up to USD 41 billion of assets held by SBG and authorized the repurchase of up to USD 18 billion of SBG common stock with the balance to be used for debt redemptions, bond buybacks and increase cash reserves.
The transactions will be executed over the next four quarters. The newly authorized program is in addition to the JPY 500 billion share repurchase program SBG announced on March 13, 2020. Currently, SBG has more than USD 245 billion of assets and USD 15 billion of cash on its balance sheet.
“This program will be the largest share buyback and will result in the largest increase in cash balance in the history of SBG, reflecting the firm and unwavering confidence we have in our business,” said Masayoshi Son, Chairman and Chief Executive Officer of SBG. “This will allow us to strengthen our balance sheet while significantly reducing debt. Moreover, the monetization of assets represents less than 20 percent of the Company’s current asset value.”
SBG believes its shares are substantially undervalued and as of the end of last week traded at a 73 percent discount to their intrinsic value, the largest discount in the Company’s history. The two buybacks – this and the previously announced buyback on March 13 – would result in the Company repurchasing and retiring 45 percent of SBG’s stock.
The Company has been taking steps to unlock the significant value of the assets currently held by SBG, including asset dispositions, the spinoff of SoftBank Corp., the merger of Sprint and T-Mobile, the USD 5.5 billion share repurchase (announced in February 2019) and the USD 4.5 billion share repurchase program announced in March 2020. SBG believes the enhanced share repurchase program and significant debt reductions, including bond buybacks, will further strengthen its balance sheet and enhance its credit rating. These actions highlight the Board’s confidence in the long-term growth of the business. As part of the Company’s continued efforts to enhance its governance efforts, the Board has hired an independent search firm to identify up to three qualified candidates whom the Company plans to present as new independent board members at this year’s Annual General Meeting of Stockholders.
Under the share repurchase program, SBG may purchase shares of its common stock through various means, including open market transactions, privately negotiated transactions, tender offers or any combination thereof. The number of shares repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, stock price, trading volume and general market conditions, along with general business conditions and other factors.