Japanese Web Firm, Broadcaster in Fragile Peace Accord

05 December 2005

The tense standoff between Japanese online shopping firm Rakuten and television station Tokyo Broadcasting System appears to have been resolved - in theory at least.

The duo have agreed to discuss an operational alliance, thereby heading off a potential hostile bid by Rakuten. The latter has amassed a 19.09% stake in TBS over recent weeks, as it has tried to bend the reluctant broadcaster to its vision of a "world class" media empire through merger.

Rakuten ceo Hiroshi Mikitani and his TBS counterpart Hiroshi Inoue have signed a memorandum that includes an olive branch from the internet company undertaking not to exercise voting rights on a large block of its TBS shares.

Says Mikitani: "We decided to withdraw merger proposal for the time being. It is more important to deepen mutual understanding by discussing merits of a merger."

A more wary Inoue avers: "Because Rakuten is not completely releasing the TBS shares, we still have a certain level of tension. We should first build a mutual trust."

Data sourced from Asahi Shimbun Online; additional content by WARC staff