Tokyo Broadcasting System Inc. said Monday it has set up an in-house panel to study a proposal from Rakuten Inc. to integrate their operations under a joint holding company.
The panel, which comprises TBS executives and outside experts, is expected to take more than a month to reach a conclusion for presentation to Rakuten as a counterproposal, according to company sources.
TBS appears likely to reject Rakuten's proposal for fear that it would be absorbed by the Internet shopping mall operator, which has a much larger stock market value, they said.
TBS instead is expected to propose a business tieup in which the television broadcaster would primarily offer its programs for Internet distribution by Rakuten.
But as Rakuten President Hiroshi Mikitani has said he will pursue management integration of the two companies "even if I go broke," Rakuten may acquire more TBS shares if the TV network comes up with unsatisfactory proposals, analysts said.
Rakuten is TBS's biggest shareholder with an equity stake of 15.46 percent.
The price of TBS shares fell Monday for the first time in four trading days, hit by uncertainties over its future course after Rakuten's tieup proposal.
It dropped 240 yen from Friday, or 6.33 percent, to end the day at 3,550 yen. It was the sixth-biggest percentage decliner on the Tokyo Stock Exchange's first section.
Many investors unloaded TBS shares on speculation that negotiations between the broadcaster and Rakuten on whether to set up the joint holding company have reached a stalemate, brokers said.
As part of its defensive measures against a possible hostile takeover bid, TBS allocated equity purchase warrants in June to Nikko Principal Investments Japan Ltd., a wholly owned subsidiary of its financial adviser, Nikko Cordial.