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SoftBank Group President Nikesh Arora plans to buy about 60 billion yen ($483 million) of the company's shares, saying he wants to make a "personal bet" as a measure of his commitment.
"This is a large transaction for me, and involves taking an enormous risk," Arora said in a filing to the Tokyo Stock Exchange on Wednesday. "However, I am extremely confident about the future of the SoftBank Group."
Founder Masayoshi Son promoted Arora to president effective in July and said he was likely to succeed him in running the company. Arora, 47, earned about 16.6 billion yen between joining SoftBank in September and the end of March.
"It will increase his credibility in the eyes of investors, as it shows his commitment to the company," Satoru Kikuchi, an analyst at SMBC Nikko Securities, said by phone. "Arora has been in SoftBank only for a year, so it is too short of a time to let the market value him."
Arora will acquire the shares as a "programme trade over the next six months," according to the statement. The stake would make Arora the biggest individual shareholder after Son, according to data compiled by Bloomberg.
"I am delighted that Nikesh has decided to double down on his partnership with me at the SoftBank Group," Son said in the statement. "I expect him to succeed me at the appropriate time." SoftBank rose 0.5 per cent to 7,477 yen prior to the announcement in Tokyo on Wednesday. The stock traded 1.4 per cent higher in Frankfurt.
"There cannot be a more bullish statement than this for the stock," said Atul Goyal, an analyst at Jefferies Group. "This happens a lot with senior management, but I haven't heard of this big a stake taken by anyone."
Goyal, who recommends buying SoftBank stock, forecast the shares will trade at 12,200 yen in a year, 63 per cent higher than Wednesday's closing price in Tokyo.
