PDF No-Action Letter: Yahoo Japan Corporation

DIVIS ION OF CORPORATION FINANCE

UNITED STATES

SECURITIES AND EXCHANGE COMM I SSION

WASHINGTON , D.C. 20549

Jul y 9 , 2 018

Response of the Office of Mergers and Acquisitions Division of Corporation Finance

Via Email

Jesse S. Gillespie Morrison & Foerster LLP jgillespie@mofo .com

Re: Partial cash tender offers for Shares of Yahoo Japan

Dear Mr. Gillespie:

We are responding to your letter dated July 9, 2018, addressed to Ted Yu and Christina Chalk, as supplemented by telephone conversations with the staff, with regard to your request for exemptive and no-action relief. To avoid having to recite or summarize the facts set forth in your letter, we attach a copy of your letter and the accompanying letter from Japanese counsel. Unless otherwise noted, capitalized terms in this response letter have the same meaning as in your letter dated July 9, 2018.

Section I

On the basis of the representations and the facts presented in your letter, the Division of Corporation Finance, acting for the Commission pursuant to delegated authority, by separate order is granting an exemption from Exchange Act Rule 14e-5 . This exemption permits the SoftBank Parties to conduct concurrent issuer and third party tender offers for Yahoo Japan Shares as described in your letter.

In granting the exemptive relief described above, we note your representation that the Tender Offers by the SoftBank Parties for Yahoo Japan Shares are necessitated by Japanese Mandatory Bid Rules and are effectively the equivalent of bilateral block trades structured as tender offers to comply with Japanese law. We further note that the economic terms of the Tender Offers will be the same and both will be made at a price that is expected to be at or below the market price of the Yahoo Japan Shares after the commencement of the Tender Offers. In addition, the Tender Offers will be substantially similar in size, procedures (including duration), and documentation.

Jesse S. Gillespie, Esq. Morrison & Foerster LLP July 9, 2018 Page 2

Section II

Based on the representations in your letter, the Division of Corporation Finance will not recommend enforcement action under Exchange Act Rule 14e-1 (c). This no-action position under Rule 14e-l(c) allows SoftBank Corp. to pay for Yahoo Japan Shares tendered into its Third Party Tender Offer no later than five business days after the expiration of that offer. It also permits Yahoo Japan to pay for Yahoo Japan Shares tendered into its Self Tender Offer no later than 16 business days after the close of that offer. According to your letter, the significantly longer settlement period for the Self Tender Offer is necessitated by Japanese tax withholding requirements that are applicable to the Self Tender Offer but not the Third Party Tender Offer. We further note the SoftBank Parties' representations that they will endeavor to pay for tendered Yahoo Japan Shares as quickly as possible after expiration and that if either Tender Offer is not consummated, the tendered Yahoo Japan Shares will be returned promptly.

The foregoing exemptive and no-action relief is based solely on the representations and the facts presented in your letter dated July 9, 2018, and does not represent a legal conclusion with respect to the applicability of the provisions of the federal securities laws. The relief is strictly limited to the application of the rules listed above to these transactions. You should discontinue the transactions pending further consultations with the staff if any of the facts or representations set forth in your letter change. In addition, this position is subject to modification or revocation if at any time the Commission or the Division of Corporation Finance determines that such action is necessary or appropriate in furtherance of the purposes of the Exchange Act.

We also direct your attention to the anti-fraud and anti-manipulation provisions of the federal securities laws. Responsibility for compliance with these and any other applicable provisions of the federal securities laws rests with the participants in these transactions. The Division of Corporation Finance expresses no view with respect to any other questions that these transactions may raise, including, but not limited to, the adequacy of the disclosure concerning, and the applicability of any other federal or state laws to, these transactions.

Sincerely,

Isl Ted Yu

Ted Yu Chief, Office of Mergers & Acquisitions Division of Corporation Finance

UNITED STATES OF AMERICA BEFORE THE

SECURITIES AND EXCHANGE COMMISSION

July 9, 2018

In the Matter of Tender Offers for Shares of Yahoo Japan Corporation

ORDER GRANTING EXEMPTION FROM EXCHANGEACTRULE 14E-5

SoftBank Group Corp. and other parties submitted a letter, dated July 9, 2018, requesting that the Securities and Exchange Commission ("Commission") grant an exemption from Exchange Act Rule 14e-5 for the transactions described in their letter ("Request").

Based on the representations and the facts presented in the Request, and subject to the terms and conditions described in the letter from the Division of Corporation Finance dated July 9, 2018, it is ORDERED that the request for an exemption from Exchange Act Rule 14e-5 is hereby granted.

For the Commission, by the Division of Corporation Finance, pursuant to delegated authority.

Brent J. Fields Secretary

Action as set forth or recommended herein APPROVED pursuant to authority delegated by the Commission under Public Law 87-592. For: Division of Corporation Finance

By: Isl Ted Yu Date: July 9, 2018

MORRISON I FOERSTER

July 9, 2018 Division of Corporation Finance Securities and Exchange Commission 100 F Street, NE Washington, D.C. 20549

SHIN-!vlARUNOUCHI BUILDING, 29THFLOOR 5-1, MARUNOUCHI 1-CHO!vffi CHIYODA-KU, TOKYO 100-6529,JAPAN

TELEPHONE: +81 3 3214 6522 FACSIMILE: +81 3 3214 6512

MORRISON & FOERSTER LLP

BEIJING, BERLIN , BRUSSELS, DENVER, HONG KONG , LONDON , LOS ANGELES, NEW YORK , NORTHERN VIRGINIA , PALO ALTO, SAN DIEGO , SAN FRANCISCO , SHANGHAI , SINGAPORE , TOKYO , WASHINGTON , D.C.

WWW.

Writer's Direct Contact

+81 (3) 3214-6833 JGillespie@

Attn: Ted Yu, Chief, Office of Mergers and Acquisitions; Christina Chalk, Senior Special Counsel, Office of Mergers and

Acquisitions

Re: Proposed Cash Tender Offers by SoftBank Corp. and Yahoo Japan

Dear Mr. Yu, Ms. Chalk:

We are writing this letter on behalf of (i) SoftBank Group Corp., a global technology company incorporated and based in Japan whose shares are listed on the Tokyo Stock Exchange, ("SoftBank Group") (ii) SoftBank Corp., a privately-held telecommunications operator incorporated and based in Japan, and (iii) Yahoo Japan Corporation, an internet services provider incorporated and based in Japan whose shares are listed on the Tokyo Stock Exchange ("Yahoo Japan" and, collectively with SoftBank Group and SoftBank Corp., the "SoftBank Parties"), in reference to a complex series of transactions (the "Transactions") which incorporates parallel partial cash tender offers for outstanding common shares of Yahoo Japan ("Yahoo Japan Shares") to be conducted by each of SoftBank Corp. and Yahoo Japan, as set forth in further detail below. Each of the SoftBank Parties is a foreign private issuer as defined in Rule 3b-4 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). SoftBank Corp. and Yahoo Japan are both consolidated subsidiaries of SoftBank Group, which is the controlling shareholder of both with aggregate direct and indirect ownership, as of March 31, 2018, of 99.99% and 42.9% of the outstanding common shares of SoftBank Corp. and Yahoo Japan, respectively.

The commercial objective of the Transactions is to effect what is in commercial substance a pair of block trades: (i) the purchase (the "Altaba Sale") by SoftBank Corp. from Altaba Inc. (''Altaba"), a U.S. registered investment company, of Yahoo Japan Shares in an amount corresponding to approximately $2 billion at the prevailing closing price of such shares on the main board of the Tokyo Stock Exchange prior to the first public announcement of the Transactions (the "Pre-Announcement Share Price") (such amount expected to correspond to approximately 10% of the outstanding Yahoo Japan Shares) and (ii) the repurchase (the "Yahoo Japan Repurchase") by Yahoo Japan of its shares held by SoftBank Group in an amount corresponding to approximately ?220 billion at the Pre-Announcement Share Price (such amount expected to correspond to

I MORRISON FOERSTER

Mr. Ted Yu and Ms. Christina Chalk July 9, 2018 Page Two

approximately 10% of the outstanding Yahoo Japan Shares). Due to Japanese regulatory considerations, described in more detail below, it is necessary to conduct each of the Altaba Sale and Yahoo Japan Repurchase by means of separate but parallel cash tender offers (the "Tender Offers") to be made by SoftBank Corp. and Yahoo Japan, respectively, to all holders of Yahoo Japan Shares upon substantially similar procedures and for identical consideration.

As previously discussed with members of the staff of the Division of Corporation Finance (the "Sta.ff') of the Securities and Exchange Commission (the "SEC'), we hereby respectfully request, on behalf of SoftBank Corp., Yahoo Japan and, to the extent it may be deemed to be a bidder in the tender offers, SoftBank Group, that the Staff grant exemptive relief from the provisions of Rule 14e-5 under the Exchange Act ("Rule 14e5") and that the Staff confirm that it will not recommend that the Securities and Exchange Commission take enforcement action pursuant to Rule 14e-1 (c) under the Exchange Act ("Rule 14e-l(c)"), in relation to the Tender Offers.

I. Background

A. Yahoo Japan and the SoftBank Group/Altaba Joint Venture Agreement

Yahoo Japan was founded on January 31, 1996 as a joint venture between SoftBank Group (then "SoftBank Corp.") and Altaba (then "Yahoo! Inc."), and SoftBank Group (through a wholly-owned subsidiary) and Altaba remain the largest shareholders of Yahoo Japan, with a combined ownership of approximately 78.5% (or 42.9% and 35.6%, respectively) as of March 31, 2018. As a result, the public float of Yahoo Japan, which is a Japanese public company, traded on the Tokyo Stock Exchange, accounts for less than 25% of its ?2,073 billion market capitalization, as of June 28, 2018. SoftBank Group and Altaba are parties to a joint venture agreement (the "JVA") whereby, among other things, the parties thereto grant a mutual right of first refusal regarding disposals of Yahoo Japan Shares held by the other party. SoftBank Group, Softbank Corp. and Altaba plan to enter into an agreement or agreements (the "Transaction Agreements"), whereby (i) they will terminate the NA, (ii) Altaba will agree to tender at least $2 billion worth of Yahoo Japan Shares into a partial cash tender offer (the "Third Party Tender Offer") to be made by SoftBank Corp. at a fixed tender price equal to the Pre-Announcement Share Price for up to $2 billion worth of Yahoo Japan Shares valued at such price (corresponding to up to approximately 10% of the outstanding Yahoo Japan Shares), (iii) SoftBank Group will agree to tender ?220 billion worth of Yahoo Japan Shares into a partial cash issuer self-tender offer (the "Self Tender Offer") conducted by Yahoo Japan, at a fixed tender price equal to the Pre-Announcement Share Price for up to ?220 billion worth of Yahoo Japan Shares valued at such price (corresponding to up to approximately 10% of the outstanding Yahoo Japan Shares), (iv) Altaba will agree not to tender its Yahoo Japan Shares in the Self Tender Offer, (v) SoftBank Group will agree not to tender its Yahoo Japan Shares in the Third Party Tender Offer and (vi) SoftBank Group will agree to provide Altaba certain ongoing minority investor protections and other rights with respect to its continued ownership interest in Yahoo Japan.

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