Fighting off Livedoor and taking Nippon Broadcasting fully in-house (2005)

Righting an inverted capital structure

What Fuji Television finally addressed was not the removal of a bidder but the inversion left untouched since its founding — a subsidiary, Nippon Broadcasting, sitting as the largest shareholder of its own parent. A company worth ¥600 billion could be controlled through one worth ¥200 billion, and the simplified share exchange that brought Nippon Broadcasting into full ownership put that right. What Livedoor exploited was not a lapse of management but this hole itself, symbolised by a 22.5% stake.

Control was defended; the contest itself, however, created no value. Analyses of the share prices show that all three companies fell each time defensive news appeared, and once the share loan settled the matter, the value built on expectation was given back. What was protected was continuity of management, not value for shareholders. The price of leaving inverted capital in place for decades surfaced most sharply at the moment it was corrected.