Masa's Hunger for Cash Is a Boon for SoftBank IPO

(Bloomberg Opinion) -- Masayoshi Son’s hunger for cash to keep funding a 100-year vision may end up being the best reason for investors to consider his telecom spinoff SoftBank Corp.

SoftBank Group Corp., the parent, is expected to reap around $21.1 billion from the initial public offering of the telco. Earlier this month Son cited this money when he said the Vision Fund isn’t desperate to raise cash. That comment followed a question about whether he'd accept further funding from Saudi Arabia after the scandal over the murder of writer Jamal Khashoggi.

Beyond that $21.1 billion, SoftBank Corp. said Monday it expects to maintain an 85 percent dividend payout ratio. After the IPO, SoftBank Group will own 63 percent of the telco, according to its prospectus. That means 54 percent of the unit’s net income would flow to the parent every year in cash.

With net income averaging 417 billion yen over the past three years, and assuming the bottom line remains around this level, 225 billion yen goes to SoftBank Group, or about $2 billion.

That’s a handy chunk of change. It also means that investors in the telco should benefit from their interests being aligned with those of Son himself.

To contact the editor responsible for this story: Rachel Rosenthal at rrosenthal21@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.

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