MASAYOSHI SON has a US$8.6 billion dilemma on his hands.

    His SoftBank Group Corp. is the largest investor in Yahoo Japan Corp., controls several board seats and wields more power over Japan’s most profitable website than anyone. That’s been possible because Marissa Mayer’s Yahoo Inc., the next biggest shareholder with 35.5 percent, has been happy to leave management to Japan’s second-richest man.

    Now Yahoo is said to be considering asset sales, including possibly disposing of its US$8.6 billion stake in the Japanese portal, which may force Son to spend money maintaining his grip on a company he already effectively controls. Those resources could be better used to shore up his struggling Sprint Corp. or other investments without adding to SoftBank’s existing US$109.4 billion in long-term liabilities.

    “SoftBank faces three options: issue debt and buy it itself, hope someone friendly steps in to help or, failing all that, have the stake sold in the open market,” said Masamitsu Ohki, the chief portfolio manager at Fivestar Asset Management Co. “Selling in the open market would be awful.”

    With Mayer failing to deliver on a turnaround after three years at the helm, Yahoo’s board is considering options to cope with a slump in growth. That includes an earlier plan to spin off its shares in Alibaba or sell other assets, such as its core Internet search and portal business and the Yahoo Japan holdings. No decision was announced after a meeting last week.

    Despite controlling more than a third of Yahoo Japan, Mayer’s company has mostly kept a hands-off approach. Yahoo leases its brand and technology while letting local management call the shots, a former executive, Susan Decker, said last year.

    That’s given Son leeway to steer Yahoo Japan closer to SoftBank, including installing president Nikesh Arora as chairman, allowing the companies to share customer information.

    SoftBank, which owns 36.4 percent of Yahoo Japan, said in November it plans to strengthen collaboration next fiscal year. The portal made up 22 percent of SoftBank’s operating profit in the six months through September.

    For Yasuaki Kogure, a hostile new shareholder could challenge that, making Son the most likely candidate to buy the stake should Mayer sell it. Outsiders would require more consensus among shareholders, making management decisions within Yahoo Japan more difficult.

    “Having the shares fall in the wrong hands would be the biggest problem, and that’s what they want to avoid,” said Kogure, chief investment officer at SBI Asset Management Co., which holds shares in both SoftBank and Yahoo Japan.

    Still, if it was that simple, “they would have bought it a long time ago. Yahoo Inc. has probably approached them about it already in the past,” said Kogure.

    Another potential hurdle is that combining stakes the size of SoftBank’s and Yahoo’s may trigger a mandatory bid for the rest, an issue Son could overcome by diluting the stock via a small offering, said Nicholas Benes, representative director of the Board Director Training Institute of Japan. (SD-Agencies)