JAPANESE technology investor SoftBank Group’s shares closed at a three-year high on Wednesday after the Financial Times reported that activist investor Elliott Management rebuilt a stake worth more than $2 billion.
Elliott is calling for a $15 billion share buyback and has engaged directly with SoftBank’s senior management over the past two to three months, the report said, citing people familiar with the matter.
The U.S. hedge fund expects a buyback to deliver an immediate boost to the share price and act as a sign of SoftBank CEO Masayoshi Son’s confidence in his strategy, the FT said.
Shares in SoftBank jumped more than 5% following the report, before paring gains to end the day up 4.6% at 9,420 yen, the highest in three years.
SoftBank declined to comment on the FT report, while Elliott did not immediately respond to a Reuters request for comment.
In 2020, Elliott amassed a $3 billion stake in SoftBank and pushed for a $20 billion buyback and improved corporate governance.
SoftBank had embarked on a buyback programme at the time. Elliott later sold off the remainder of its stake in 2022 after the Japanese conglomerate’s portfolio was hit by a collapse in tech valuations.
SoftBank’s financial position is much stronger than in 2022, thanks to a blockbuster market debut for British chip-designer Arm Holdings , in which the Japanese firm holds a 90% stake.
The rapid adoption of artificial intelligence, from which Arm is expected to benefit, has helped its share price more than double since then, boosting the value of SoftBank’s assets after its portfolio of high-growth technology startups fell out of favour with investors.
SoftBank now trades at a large discount to the value of its assets.
Elliott has been active in Japan this year, building stakes in Japan’s biggest property group Mitsui Fudosan, and trading company Sumitomo Corp.
Previously, it had called for change at Dai Nippon Printing and scandal-hit Toshiba Corp.- Reuters