Sony plans bid against Blackstone and KKR for $1.3 billion manga app

(Bloomberg) — Sony Music Entertainment is preparing a bid against private equity funds Blackstone Inc. and KKR & Co. to acquire Japanese electronic comics provider Infocom Corp.

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A second round of bidding for Teijin Ltd.’s entire stake in Infocom will be held in May, according to people familiar with the matter, who requested anonymity discussing nonpublic information.

The music arm of Sony Group Corp. is discussing an offer with Japanese fund Integral Corp. and the suitors are considering acquiring all of Infocom’s shares to take manga app operator Mecha Comics private, one of the people said. Industrial textiles maker Teijin owns 55.1% of Infocom, according to data compiled by Bloomberg.

Tokyo-based Sony has been looking to expand its content offering and has become more active in high-profile deals. It is now partnering with Apollo Global Management Inc. on a proposed $26 billion purchase of Paramount Global, which owns the rights to films such as The Godfather and Top Gun: Maverick.

Sony shares fell about 1.8% in Tokyo, hitting a 13-month low, weighed on concerns about how it would finance a deal with Paramount. Infocom shares remained untraded due to excessive buy orders and were expected to rise to their daily limit. Teijin shares rose 3.6% to their highest level since September.

Representatives for Sony, Teijin and Blackstone declined to comment, while Integral and KKR did not respond to requests for comment.

Sony’s interest makes a sale of Infocom more realistic, according to Go Miyamoto, an analyst at SMBC Nikko Securities. The proceeds and gains from the sale are now likely to be on a much larger scale and could reach 116 billion yen, he said in a note to investors.

The electronic comics market has been expanding rapidly within the smartphone ecosystem, with annual sales of digital manga now more than double those of their paper counterparts at ¥483 billion. Mecha Comics faces manga app rivals, including those run by Japan’s biggest messaging platform Line Corp., as well as those operated by units of South Korean messaging giant Kakao Corp. and Japanese telecommunications giant Nippon Telegraph & Telephone Corp.

Teijin, which hit a 52-week low in February, has been looking to scale back its non-core operations to focus on long-term growth.

The story continues

In addition to its music operations, Sony Music Entertainment owns Aniplex, producer of the box office hit anime Demon Slayer. It also has a stake in Japanese anime distributor Crunchyroll, a joint venture with Sony Pictures Entertainment.

Blackstone provided financing to Candle Media, a studio led by former Disney executives, while KKR invested in David Ellison’s Skydance Media.

–With assistance from Yuki Furukawa, Manuel Baigorri and Edwin Chan.

(Updates with shared reaction and analyst comments)

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