News Article

Yamauchi's Heirs Have "Desire To Sell" Shares In Nintendo, Claims Report

Posted by Damien McFerran

Nintendo willing to splash $1.1 billion in buyback deal

It was previously reported that Nintendo was looking to buy back as many as 10 million of its own shares in a buyback deal, and today more details regarding that arrangement have been revealed.

Bloomberg is reporting that the heirs of Hiroshi Yamauchi — who passed away last year — are looking to sell the shares they inherited following his death. These represent around 10 percent of the total shares.

Nintendo has stated that it is prepared to purchase as many as 9.5 million shares — around 7.4 percent of the total outstanding stock — at 12,025 yen apiece in a deal worth 114.2 billion-yen ($1.1 billion). It is not currently known how many of the shares the Yamauchi family is prepared to part with.

Nintendo currently has around $8.6 billion in the bank and no debt to speak of. Nintendo's stock is low at present and therefore means it's the perfect time to pick it up on the cheap; since reaching its zenith of 72,100 yen in November 2007, Nintendo's share price has dropped 80 percent.

[via bloomberg.com]

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User Comments (27)

arronishere

#1

arronishere said:

I'm not sure to take it as a good that Ninty are getting shares back or as a bad sign that the Yamauchi family want rid.

Buduski

#2

Buduski said:

So how exactly does it work? Nintendo buys back its own stocks so who manages them or is entitled to them? Not 100% how all that works

MAB

#3

MAB said:

Hey, if I had shares that would net me 1 billion smackaroos I would sell them too ;)

MrGawain

#4

MrGawain said:

If Nintendo don't buy back their shares then another company could buy them up and take them over- Apple, Microsoft, Disney, Sony etc...

If Nintendo want to remain independent and control their own destiny with how they sell their brand and product, they have to do this.

MadAdam81

#6

MadAdam81 said:

Not sure how much Nintendo stocks is owned directly by the company and how much is in the share-market, but I would assume that it's over 50%, to prevent others coming in to seize control.

Buduski

#7

Buduski said:

@ChoppedLiver. If thats so, do you know who the representatives of the board are? Just curious really, hope this won't end up being something bad for Nintendo

MrGawain

#8

MrGawain said:

@MadAdam81

But if you counted in the percentage of shares owned by Mr Yamauchi into that 51% (seeing he founded the company), then at this moment in time Nintendo could be bought out if the Yamauchi's sell to a rival bidder. They are obviously 9.5 million shares shy of total control, otherwise they wouldn't be trying to buy 9.5 million shares.

nikachus01

#9

nikachus01 said:

@Buduski

There are to possible scenarios when a company buys back it's own shares:

1. The shares are bought back by the company and they are then cancelled. They will cease to exist and thus no-one is entitled to them anymore and the total number of shares in the company is decreased; or

2. The shares are bought back and the company classifies them as as Teasury Shares". The possession of these shares by the company does not give the company the right to vote, to exercise rights as a shareholder or to receive dividends. They are essentially deemed to be unissued capital and and they can subsequently be sold again to investors (unlike cancelled shares which no longer exist).

So either way, it does not grant Nintendo any further rights or votes to anything, it is just a way to manage the ownership/capital structure of the company.

unrandomsam

#10

unrandomsam said:

@MrGawain It is not obvious. There is loads of ways it can be set up. (You can have it where 1 share on its own can override all the rest).

vattodev

#15

vattodev said:

Isn't this news from last year? Well, at least now they said the exact amount of shares to be traded. Anyway, it's nothing unexpected. Nintendo has to protect their stocks because the family had said that they didn't want to keep it. If all those stocks went into the market, it would create a huge speculation problem due to high offer.

rjejr

#17

rjejr said:

Companies buy stock to prop up the share. It shows investors they believe in their own future and sell shares available makes them worth more - simple supply and demand.
No other company would buy them right now, the potential for the stock to go much lower is still there.

I really really really wish Nintendo would release some actual good game news so we can stop talking about stock. Wii U must have some games coming out this year.

How about a level of DK as a home demo? Sonic had a level. Put the WW HD demo from Target in the home. The olympic game demo in Target should REALLY be in the home, the Olympics start Friday. If Nintendo is too incompent or stupid to move a demo that already exists in stores to the home when the Olympics start then I really don't know what to think about their Wii U management plans.

shigulicious

#18

shigulicious said:

Buy low sell high. Even if Nintendo were making this decision based on profit potential alone, it's a smart move. Keeping the shares "in house" helps them control the temperament of the stock price a little.

Nintenjoe64

#21

Nintenjoe64 said:

I am surprised there isn't a Yamauchi who wants to be like Hiroshi or maybe they all want to run the company and that's why Iwata wants to buy them out.

@rjejr so true, all we're hearing is business news and Nintendo aren't even trying to damage control with a bit of game news. They've sat on Bayonetta and Mario Kart demos for months. They could at least give wii u owners some kind of glimmer of hope that they're not being swept under the carpet.

Peach64

#22

Peach64 said:

I'm pretty sure Nintendo doesn't want to be buying these right now as it's going to be a big drain on their finances, but they l have no choice. The Yamauchi family want to sell, and having that many shares openly for sale would drastically push down the share value and really annoy other shareholders, not to mention leave themselves open to a takeover.

Chomposaur

#23

Chomposaur said:

Wow even the Yamauchi family don't have faith in Nintendo anymore. That doesn't sound promising

HaNks

#24

HaNks said:

uncertain times. i'm not sure being a publicly listed company really serves nintendo either. valve are the best example and arguably the cutting edge of games companies. can do whatever they like and that pays off in all kinds of ways. in an ideal world nintendo would have people who understand economics as well as valve and go private. not sure about the japanese laws though.

BertoFlyingFox

#25

BertoFlyingFox said:

It sucks that they have to deal with this now but it could probably help along with their re-structuring.

Yeesh, some gamers expect instant gratification.

Wildfire

#27

Wildfire said:

A couple years ago I read a book about Nintendo and one thing that is mentioned is the clear distance that Yamauchi's heirs have towards the company. This also explains why Iwata succeded to Hiroshi Yamauchi and not a relative on a traditional family run business for years. So the heirs desire to sell their shares don't surprise me the least!

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