SoftBank mulls stake sale in M&A adviser Raine Group

Bloomberg

SoftBank Group Corp is considering selling its stake in the holding company of Raine Group, the merchant bank that’s advised on some of the Japanese company’s biggest deals, people familiar with the matter said.
The potential stake sale would fit into SoftBank’s retrenchment from a deal-hungry technology conglomerate to one more focused on smaller investments, according to the people.
SoftBank owns a small minority stake in Raine, they said, asking not to be identified discussing confidential information. Deliberations are ongoing and there’s no certainty they’ll lead to a transaction.
A representative for SoftBank declined to comment, while a spokesperson for Raine didn’t respond to requests for comment.
Masayoshi Son, SoftBank’s founder and chief executive officer, invested in Raine when it was launched in 2010 by Joseph Ravitch, an ex-partner at Goldman Sachs Group Inc, and Jeffrey A Sine, a former senior banker at UBS Group AG.
The New York-based adviser has maintained a long and lucrative relationship with SoftBank, advising on some of its most high-profile deals. These included the acquisition of British semiconductor designer ARM Holdings Plc—the biggest ever Asia-to-UK takeover—which cost SoftBank more than $200 million in fees and expenses.
SoftBank has dramatically slowed the pace of dealmaking at its $100 billion Vision Fund. The flagship vehicle posted a $7.2 billion quarterly loss late last year after the values of portfolio companies such as SenseTime Group Inc, DoorDash Inc and GoTo Group fell. Markdowns on its investments in unlisted startups, meanwhile, continue to weigh on the Vision Fund’s venture capital arm.
The conglomerate has been selling off assets, including a chunk of its stake in Alibaba Group Holding Ltd, to raise cash and shore up its balance sheet. Son is personally on the hook for about $5.1 billion on side deals he set up at SoftBank to boost his compensation.
Other acquisitive companies have also previously bought stakes in advisory firms as they embarked on global deal sprees. Chinese conglomerate HNA Group Co previously invested in at least two firms that it hired for deals, including Deutsche Bank.
Internet giant Tencent Holdings Ltd is the biggest shareholder of China International Capital Corp, the country’s first investment bank. Serial dealmaker Alibaba has its own stake in CICC, which it has hired for M&A deals.
Affiliates of Alibaba or its billionaire founder have also invested in boutique advisory firm China Renaissance Holdings Ltd and Hong Kong investment bank Reorient Group Ltd.