(Reuters) -Activist investor Elliott Management has rebuilt a stake worth more than $2 billion in Japanese technology investor SoftBank Group and is calling for a $15 billion share buyback, a person familiar with the matter told Reuters.
Shares in SoftBank jumped more than 5% after the news, before paring gains to end the day up 4.6% at 9,420 yen, the highest in three years.
Elliott has engaged directly with SoftBank’s senior management over the past two to three months, the person said.
The U.S. hedge fund expects a buyback to deliver an immediate boost to the share price and act as a sign of SoftBank CEO Masayoshi Son’s confidence in his strategy, according to the source.
SoftBank declined to comment, while Elliott did not immediately respond to a Reuters request for comment.
In 2020, Elliott amassed a $3 billion stake in SoftBank and pushed for a $20 billion buyback and improved corporate governance.
SoftBank had embarked on a buyback programme at the time. Elliott later sold off the remainder of its stake in 2022 after the conglomerate’s portfolio was hit by a collapse in tech valuations.
The Japanese company’s financial position is much stronger than in 2022, thanks to a blockbuster market debut for British chip-designer Arm Holdings, in which SoftBank holds a 90% stake.
The rapid adoption of artificial intelligence has helped Arm’s share price more than double since going public, boosting the value of SoftBank’s assets after its portfolio of high-growth technology startups fell out of favour with investors.
SoftBank now trades at a large discount to the value of its assets.
Elliott has been active in Japan this year, building stakes in the country’s biggest property group Mitsui Fudosan, and trading company Sumitomo Corp.
Previously, it had called for change at Dai Nippon Printing and scandal-hit Toshiba Corp.
The Financial Times was the first to report the development.
($1 = 155.6500 yen)
(Reporting by Kanjyik Ghosh, Anton Bridge and Anousha Sakoui; Editing by Rashmi Aich, Sriraj Kalluvila and Devika Syamnath)
