SoftBank to sell Yahoo shares to Citi to repay $1.1 billion trillion loan

(i) Beijing time August 26, 2011 News, according to foreign media reports, SoftBank company said today that it has decided to Citibank to Citigroup to sell the majority of its 4% stake in Yahoo, to repay Citigroup's about 1.135 billion U.S. dollars of loans.　　Through the deal, SoftBank's stake in Yahoo will be reduced from about 4% to 0.002%. According to the I stock calculation, both sides of the transaction to Yahoo Company's total valuation of 28.5 billion U.S. dollars, about 22.6 dollars per share.　　The Thursday closing Yahoo market value is 16.25 billion U.S. dollars, 12.87 dollars per share. Does that mean Citi is willing to price 22.6 dollars (at a premium of 70%!).　　To buy Yahoo? Not too! SoftBank's deal with Citi, which originated a loan agreement years ago, is now due to be implemented.　　Citi is tantamount to being forced to buy. I have looked at the agreement between SoftBank and Citigroup at the time. The agreement, signed in March 2004, is a forward loan contract signed between SoftBank and Citi. The agreement shows that SoftBank's US subsidiary, SoftBank US (SOFTBANK America Inc.), loans $1.135 billion to Citi, with interest of about 4.6%, due on August 2011, to be repaid with Yahoo shares. The deal involved a total of 26 million shares of Yahoo's ordinary shares held by SoftBank itself and 500,000 shares of Yahoo shares held by SoftBank Broadband Investments (the "JV") of SoftBank, a 98% of SoftBank's holdings.　　At that time, Yahoo market value of about 14.6 billion U.S. dollars. In other words, son at that time with a value of about 585 million U.S. dollars (then Yahoo 665 million shares, the market value of 14.6 billion U.S. dollars, 146x4%) of the Yahoo shares as collateral, to the Citi back to the 1.135 billion U.S. dollar loans, loan interest rate of 4.6%.　　Agreed to repay the stock in August 2011 (whatever the price of the stock). The essence of this deal is actually, Citi bought a "warrant" for its stake in Yahoo, with 1.135 billion dollars to SoftBank, and recognized its share price at $42.8 per share (at the time, Yahoo's total equity was 665 million shares, about $22 per share, according to today's Yahoo Total equity), which expires in August 2011 and has to be implemented. If the 4% stake is worth more than $1.135 billion in August 2011, then Citi will not only be able to earn interest on its loans, but will also be able to earn the capital gains from Yahoo shares, and if the share price falls, Citi will be able to recoup some of its principal.　　Yahoo's share price was at a low point for several years, son traded $585 million worth of shares for 1.135 billion of billions of dollars in loans, Citigroup also calculated: At that time Yahoo shares are at a low point, when Yahoo's development momentum to open, in 7 years and a half time, Yahoo shares can only rise by one times? What's the result? Citi is indeed a winner in the short term, Yahoo shares in October 2004The price has doubled since March, and it looks as if Citi will make a full pot. But what Citi may not have expected is that today, after 7.5, Yahoo's market capitalisation is only 16.25 billion dollars per share of $12.87 (as of 2011 Q2 Yahoo's total equity is 1.26 billion).　　Citi has implemented part of the "warrants", which, if not counting the interest charged over the years, is worth $16.25 billion trillion at today's market value, which is a net loss of $485 million trillion (11.35-162.5x3.998%). (I U.S. stock Shei)