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. Last Updated: 07/27/2016

Fuji TV Settles With Livedoor

TOKYO -- Japan's Fuji Television Network agreed Monday to pay a total $1.65 billion to end a two-month takeover fight over an affiliate with Internet portal Livedoor in what analysts called a face-saving deal that offered little benefit to shareholders.

The takeover fight, a rarity in Japan, had pitted Livedoor's combative president, Takafumi Horie, 32, against Japan's biggest media group and a pillar of the conservative business establishment.

Under the deal, Fuji TV, Japan's biggest television network, said it would pay a total of 131.5 billion yen ($1.22 billion) to make Nippon Broadcasting System a wholly owned unit, including the purchase of a Livedoor unit for 67 billion yen, along with a 32.4 percent NBS stake the unit owns.

Fuji also agreed to buy a 14.61 percent stake in Livedoor for 44 billion yen and form a business alliance with it, bringing the total value of the deal to 177.5 billion yen ($1.65 billion).

Livedoor had aimed to gain influence over the Fuji Sankei media group, headed by Fuji TV. Radio broadcaster NBS is a member of the conglomerate.

The two-month battle saw both firms claiming they could outdo the other in boosting NBS's enterprise value through business integration, but analysts say while the apparent compromise avoids a prolonged battle it offers little benefit for shareholders.

"It's a typical, traditional face-saving deal," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

"Both Livedoor and Fuji gave up in the middle of the fight and their possible agreement on a business alliance, including the integration of broadcast and Internet services, will have no major impact on their earnings."

Livedoor will receive a total 147 billion yen from Fuji, including its 103 billion yen sale of the 50 percent stake its group owns in NBS, about the same as the Internet firm spent to buy the 16.4 million shares in the radio broadcaster.

Fuji paid 6,300 yen per share under the deal, 5.9 percent higher than its tender offer price of 5,950 yen and a 7.1 percent premium to the share's Monday closing price.

The value of the deal to buy NBS "was only slightly higher than we had originally intended," said Masao Sakai, Fuji's senior executive manager.

To fend off Livedoor's takeover attempt, Fuji has already paid 26 billion yen to raise its dividend payouts.

Livedoor's hostile bid for NBS caused alarm in business circles, and many firms have since rushed to boost dividend payments and resume cross-shareholdings among allies.

Some have started discussions on adopting "poison pill" provisions to fend off potential takeover attempts.

Media reports that the two parties had reached an agreement boosted shares in Livedoor -- which hit a one-year low of 292 yen last Tuesday -- by 6.38 percent to a close of 350 yen.

Shares in Fuji TV ended down 3.48 percent at 222,000 yen, while NBS finished down 1.18 percent at 5,880 yen. The Nikkei average fell 3.80 percent.

Shares in Livedoor have fallen 25 percent since hitting 469 yen on Feb. 9, a day after it announced its acquisition of NBS stock, on concerns that a prolonged fight would dent its financial health.