On Thursday, Yahoo Japan said that it aims to 50.1% stake in online fashion retailer Zozo Inc for $3.7 billion to compete against rivals such as Amazon.com Inc and Rakuten Inc, as reported by Reuters. The Japanese IT giant, a subsidiary of telecoms giant and investor SoftBank Group, aims to buy up to 152.95 million shares.
Zozo founder, Yusaku Maezawa, known for buying expensive art and his space travel plans, has agreed to sell around 30% stake as a part of the offer. It would leave him with a 6% stake in the company. Additionally, he will also be stepping down as the CEO of the company which has struggled lately following a series of blotched initiatives taken.
Yahoo Japan’s offer price of 2,620 ( around $24) per Zozo share represents a premium of around 21% versus Wednesday’s closing price. The company’s share jumped as much 19% in early Tokyo trading with yahoo japan shares up to about 4%.
Yahoo’s chance to lead
The deal also offers Yahoo Japan a chance to take the lead in Japan’s online fashion space where Amazon and Rakuten have strived to make progress, and where Zozotown, Zozo’s mall, controls almost 50% of the market for mid- to high-end fashion.
Zozo holds a market value of about 680 billion yen, according to Refinitiv data. The deal would give Maezawa a windfall of around $2.3 billion.
The flamboyant entrepreneur
The entrepreneur is known for his extravagant lifestyle and eccentric comments, which includes paying $110 million for a Jean-Michel Basquiat painting and buying the ticket as the first private passenger to be taken around the moon by Elon Musk’s SpaceX. His personal fortune was valued at around $2 billion this year, making him the 22nd richest person of Japan.
Maezawa tweeted, “I will entrust Zozo to a new president and take my own path,”
Yahoo Japan is a consolidated subsidiary of telco SoftBank Corp, which in turn is regulated by tech conglomerate SoftBank Group Corp.
Yahoo Japan’s acquisition of Zozo comes at a time of change in Japanese technology, where Rakuten plans to launch its wireless telecom services in a straight challenge to SoftBank’s cash-cow business and Amazon has commenced on an aggressive push into fashion.