The company, which owns US mobile network Sprint and UK chip designer Arm, said on Monday that a listing of its mobile unit was under discussion but that “no decision has been made to officially proceed with this course”.
The deal would raise as much as ¥2tn ($18bn), according to one analyst, who added that the pivotal issue for valuation would be how much debt the company was carrying.
Bankers close to SoftBank say discussions on a possible initial public offering of the mobile phone unit were aired a number of times over the past year but were recently expedited.
Factors behind the acceleration include the health of the market, as reflected in the Topix index breaking through the 1,800 level, and a desire to get in front of Bain Capital’s IPO of Toshiba’s memory chip unit.
The same bankers said the group had not yet appointed managers for the offering, which would probably be global and spread among a range of brokerages.
Mr Son has long complained that SoftBank trades at a discount to its sector because of its high level debt, which stands at ¥14.2tn. The group also hopes the IPO will unlock the so-called “conglomerate discount” by which large groups with diverse assets tend to trade below the combined book value of the businesses, another person with knowledge of the talks said.
Shares in SoftBank rose nearly 6 per cent on Monday following news of its IPO plan. But the stock has fallen 15 per cent from its high in late October after merger talks between Sprint and rival T-Mobile USA broke down at the eleventh hour last year, leading to concerns about the standalone prospects of the struggling mobile phone company.
Softbank’s domestic telecoms business — the group’s most profitable division with annual sales of roughly ¥3tn — has long been a stable source of cash for the company as it carries out aggressive investments in global technology companies.
Tomoaki Kawasaki, analyst at Iwai Cosmo Securities, said the planned IPO was in line with SoftBank’s strategy of boosting its financial firepower to make its technology investments, and noted the Japanese mobile phone market was saturated.
“The domestic telecoms business is a stable source of revenue but the key is whether the business can grow again by capitalising on internet of things,” Mr Kawasaki said.
The plan for an IPO was first reported by Japanese business daily Nikkei.