Ellie Gibson
15:06 (BST)
25/04/2005
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Konami cuts ties with Takara
Toy company's top shareholder sells off 22.2% stake
The five year capital alliance between Konami Corp. and Takara Co. has come to an end following the Japanese software giant's decision to sell off its entire stake in Takara for 11.0 billion yen (80 million Euro).
The troubled toy manufacturer approached Konami for an investment in July 2000 amidst severe financial difficulties, and the company responded by purchasing newly issued shares.
However, Konami says that Takara has failed to deliver on promises to diversify and consolidate its business plans since. A group net loss of 15 billion yen (109.2 million Euro) was reported for the last financial year, and Konami's net profits were down by 3.3 billion yen (24 million Euro) as a result.
"We've decided to reconsider our capital alliance given the dramatic change in the business situation," the company said in a statement.
In total, 20,104,000 shares - amounting to a 22.2 per cent stake in Takara - have been sold to mobile games distributor Index Corp. for 11,016 million yen (80 million Euro). The sale will result in a profit of 6.1 billion yen (44.4 million Euro) on a group basis, according to Konami.
Takara's share price on the Tokyo Stock Exchange closed 4.8 per cent higher at 519 yen (3.78 Euro) following the news, while Konami shares rose by 0.4 per cent.
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