(Bloomberg) — Shares of Rakuten Group Inc. fell as much as 6.7% in their biggest intraday decline since May due to delays in the Tokyo-based online mall operator’s plans to consolidate its fintech operations.
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A plan to revamp Rakuten’s banking, securities, credit card and insurance businesses under one roof had fueled optimism around the debt-ridden company, which has been trying for years to turn around its fortunes. wireless activity, very loss-making.
But such a move would only happen in January, instead of a previous target of October this year, the company said, citing regulatory issues and consideration of the interests of Rakuten Bank’s minority shareholders. Shares of Rakuten Bank fell 6.9%.
Billionaire Hiroshi Mikitani’s company faces corporate bond buybacks worth about 500 billion yen ($3.2 billion) through 2025. Concern is growing that the company could miss an opportunity to benefit from the integration of its fintech arms before this deadline.
Rakuten Bank Chairman Hiroyuki Nagai earlier told Bloomberg News that the bank would protect the interests of its minority shareholders, even if that meant not implementing the group’s fintech restructuring plans. .
What Bloomberg Intelligence says
Rakuten’s decision to delay the reorganization of its fintech operations until January 2025 reinforces our view that the plan could face regulatory hurdles and shareholder opposition because it could involve the sale of non-fintech units. listed companies – Rakuten Card and Rakuten Securities – with a combined valuation higher than that. from Rakuten Bank. Any further delays could increase the group’s risk of a financing gap of around 250 billion yen by mid-2025.
-Marvin Lo and Chris Muckensturm
The parent company, which has posted losses for five consecutive financial years, sold its stake in the new Rakuten Bank last year to raise cash to shore up its finances depleted by an ill-timed foray into the saturated mobile carrier sector of the country.
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