Gungho to buy back $680 million in shares from Softbank

Puzzle & Dragons dev will capitalise on Softbank's need to reduce debt, Supercell sale could also be imminent

By Matthew Handrahan.Published Monday 6th June 2016, 9:48am GMT

Softbank will sell the majority of its stake in Gungho Online Entertainment as it seeks to offload assets and reduce its debt.

The buyer in the deal is Gungho itself, which will buy back most of the shares that Softbank has held since March 2013. According to a report from the Wall Street Journal, Gungho will tender an offer of 294 a share within 20 days of June 3, 2016.

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When it completes, the sale will be worth 73 billion ($681 million / €560 million / 472 million). A report from Reuters, translated from official Softbank documents, indicated that the sale would be equivalent to 23.5% of shares in Gungho. "The sale of GungHo shares is part of our long-term push to become a global enterprise," said Softbank's Hiroe Kotera, in a statement translated by Bloomberg.

Ultimately, the sale is about regaining stability by reducing debt. Softbank's long-term debt was around $77 billion as of March 31 this year, and Gungho is just one company in which it is seeking to reduce its stake. The most valuable is its holdings in the Chinese retail giant Alibaba, which, according to the New York Times, will bring in $8 billion.

Perhaps the most interesting deal from the perspective of the games industry still hasn't been confirmed. Bloomberg reports that Softbank is also in discussions to sell its majority stake in Supercell, which people familiar with those discussions claim is valued at $3.7 billion. This is the second time in less than a month that Bloomberg has rumoured the sale, and Softbank's apparent need to raise money lends the story a great deal of credibility.

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If a sale takes place, it will be the most valuable in the mobile games industry since Activision's $5.9 billion acquisition of King last year.

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