Softbank to merge 3 U.S. subsidiaries Clustering Ziff-Davis, Comdex, Softbank Forums may lead to spinoff

November 11, 1997|By BLOOMBERG NEWS

TOKYO -- Softbank Corp., the flagship enterprise in Japan of billionaire computer mogul Masayoshi Son, said yesterday that it will merge three of its most valuable U.S. subsidiaries in a move that will create a powerhouse in the computer products sales field.

The three are Ziff-Davis Publishing, publisher of three of the top-selling U.S. computer magazines; Comdex, the world's largest operator of computer trade shows; and Softbank Forums, which conducts sales and training for computer products.

News of the merger quickly prompted speculation the move may lead Softbank to spin off the new company to investors. That would help Softbank retire some of the 300 billion yen ($2.4 billion) in bonds it has issued in three years to finance the purchase of dozens of computer-related companies, mostly American.

Last year, Softbank paid $1.4 billion for 80 percent of California-based Kingston Technology Co., the world's largest supplier of add-on memory boards for personal computers. The year before it bought Ziff-Davis for $2.1 billion and Comdex for $800 million.

Softbank also has spent $200 million investing in 30-plus Internet start-ups, including Web search engine developer Yahoo!, Internet payments firm CyberCash. Those investments include a 20 percent stake in network software develop Novell's Japanese subsidiary and a piece of Asymetrix, founded by Microsoft Corp. co-founder Paul Allen.

Concern over Softbank's ability to service that debt load and manage its global empire has fueled a sharp decline in Softbank's share price over 19 months.

The company, which distributes more than 50 percent of the computer software programs sold in Japan, began trading over-the-counter in mid-1994 and quickly tripled to peak at 12,308 yen in April 1996, but has since plummeted 76 percent to 2,930 yen.

Helping to fuel the decline has been a sharp slowdown in the growth rate of sales in Japan of personal computers.

Pub Date: 11/11/97

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