FILE PHOTO: The Sony logo is displayed outside the company's headquarters in Tokyo, Japan February 16, 2023. REUTERS/Issei Kato/File Photo
TOKYO (Reuters) - Shares of Japan's Kadokawa were set to fall by their daily limit on Friday after the media powerhouse behind the "Elden Ring" game announced a capital tie-up with Sony instead of a widely anticipated acquisition.
The two companies said on Thursday that Sony would invest about 50 billion yen ($317 million) in Kadokawa, which will issue new shares to the technology giant to make it the top shareholder with a stake of about 10%.
Early on Friday in Tokyo, Kadokawa's shares were untraded with a glut of sell orders at the day's limit low of 3,689 yen. The stock had surged about 45% since reports emerged of the acquisition talks a month ago. "There had been expectations of a premium through a tender offer bid (by Sony), but those expectations receded," said Hideki Yasuda, senior analyst at Toyo Securities.
Shares of Sony rose more than 2%, with traders saying the limited capital tie-up with Kadokawa would leave room to allocate funds to other projects. The benchmark Nikkei average was roughly flat.
($1 = 157.7100 yen)
(Reporting by Chang-Ran Kim and Noriyuki Hirata; Editing by Lincoln Feast.)
