Elliott Management, the activist hedge fund, has built a more than $2bn stake in SoftBank Group and has been pressing for changes at Masayoshi Son’s sprawling technology company, said people with direct knowledge of the matter.
Elliott, the $38bn hedge fund known for its aggressive public campaigns against companies, chief executives and even the government of Argentina, has asked the Japanese group to find ways to boost its share price, including through buybacks, and to improve its governance.
The investment has been led by Gordon Singer, the London-based son of Elliott’s founder Paul Singer, people close to the matter said. The activist has discussed its views with Mr Son as well as Rajeev Misra, the head of SoftBank’s $100bn Vision Fund, they added.
SoftBank has a market value of $89bn, a huge discount to the sum of the parts in its portfolio. The group’s holdings include a 25 per cent stake in China’s ecommerce group Alibaba, alone worth about $150bn.
Shares in SoftBank have tumbled 21 per cent since April last year when they reached their highest level in nearly two decades.
The decline came after a string of high-profile SoftBank-backed companies, including Uber and Slack, had embarrassing stock market debuts, while a disastrous bet on office-space provider WeWork forced the Japanese group to step in with a $6.5bn rescue package to prevent insolvency.
Mr Son is SoftBank’s largest shareholder with a 25 per cent stake, making him a significant obstacle to any attempt to drive changes that do not align with his vision for the company he founded in the early 1980s.
Elliott did not respond to a request for comment. SoftBank said “it always maintains constructive discussions with shareholders regarding their views on the company and we are in complete agreement that our shares are deeply undervalued by public investors. SoftBank welcomes feedback from fellow shareholders.”
The Financial Times reported this week that Michael Ronen, a senior US executive at the SoftBank Vision Fund, was leaving after expressing concerns about “issues” at the tech group.
SoftBank, which ranks as one of Elliott’s largest positions, is the latest Japanese corporate to be targeted by the hedge fund. As the largest shareholder in property group Unizo, the group has become embroiled in one of the country’s most contentious takeover battles. The Wall Street Journal first reported on Elliott’s SoftBank stake.