Sumitomo tries to foil KDDI bid for J:COM

The Yomiuri Shimbun

Sumitomo Corp. has entered the final phase for its launching of a takeover bid for Jupiter Telecommunications Co. (J:COM)--the nation's largest cable TV provider--in a bid to counter the planned public tender offer by KDDI Corp., according to sources.

Sumitomo effectively holds a 27.7 percent stake in the cable giant, making it the second-largest shareholder. Sources said the company was planning to raise its stake to more than a third.

KDDI, the nation's second-largest mobile phone service provider, said last month it would buy out three subsidiaries of Liberty Global Inc., a U.S. media conglomerate, for 361.7 billion yen. The three subsidiaries have a combined 37.8 percent stake in J:COM.

Should KDDI acquire the 37.8 percent stake in J:COM, the mobile phone carrier would become the largest shareholder of the cable TV firm.

Sumitomo plans to raise its stake in J:COM to more than one-third, allowing it to take control of the cable TV firm. By doing so, the trading house would be able to keep other companies from influencing the business direction of J:COM--a core part of Sumitomo's broadcasting, telecommunications and film unit.

Sumitomo intends to launch its takeover bid this week as it decides its offer for the public tender.

Following KDDI's announcement last month that it would make a takeover bid of J:COM, the Financial Services Agency warned KDDI that the planned transaction could violate regulations concerning public tender offers, prompting the company to instead pursue a less than one-third stake in the cable provider. Without Sumitomo's bid, KDDI is expected to become J:COM's largest shareholder, even with the reduced stake in the company.