TOKYO (Reuters) – Yahoo Japan Corp said on Thursday it aims to buy 50.1% online fashion retailer Zozo Inc for about 400 billion yen ($3.70 billion), joining forces to better compete with rivals such as Amazon.com Inc and Rakuten Inc.
Zozo founder Yusaku Maezawa will sell around 30% of the retailer in a tender offer to Yahoo Japan, leaving him with a stake of about 6%, and step down as CEO of the company, which has struggled following a series of botched initiatives by the flamboyant billionaire.
Yahoo Japan’s offer price of 2,620 yen per share is a premium of around 21% compared to Wednesday’s undisturbed closing price. Zozo shares jumped as much 19% in early Tokyo trading with Yahoo Japan shares up around 4%.
Zozo has a market value of around 680 billion yen, according to Refinitiv data. The deal would give Maezawa a windfall or around $2.3 billion.
“I will entrust Zozo to a new president and take my own path,” Maezawa said in a Twitter post.
The entrepreneur has generated attention for his flashy lifestyle, including paying $110 million for a Jean-Michel Basquiat painting and signing up as the first private passenger to be taken around the moon by Elon Musk’s SpaceX.
However, Maezawa has recently sold part of his extensive art collection, saying he has no money.
His company, which runs the Zozotown online mall, has been struggling. In the last financial year it booked its first annual drop in earnings due to a failed experiment with bespoke tailoring and clashes with fashion brands over discounting.
Yahoo Japan is a consolidated subsidiary of telco SoftBank Corp, which in turn is controlled by tech conglomerate SoftBank Group Corp.
Reporting by Ritsuko Ando and Sam Nussey; Editing by Sandra Maler and Christopher Cushing