Fortress Soars 28% and Into Wednesday's Top 10 Gainers on SoftBank Buyout

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Japanese telecommunications giant Softbank says it has reached an agreement to acquire a United States investment company for $US3.3 billion ($A4.3 billion).

In addition to the $8.08 per share, Class A Fortress shareholders could potentially receive up to two regular quarterly dividends prior to the closing, each in an amount not to exceed $0.09 per share. Co-Chairmen Pete Briger and Wes Edens along with Chief Executive Randy Nardone agreed to remain at Fortress, and invest 50% of their after-tax proceeds from the transaction in Fortress-managed funds, SoftBank said.

It is probable that the Fortress buy is aimed at providing investment expertise for Softbank's planned $100 billion "Vision Fund" aimed at investing in new areas like AI, AR, VR and driverless cars. The IPO was well timed, capitalizing on the market's exuberance for all things financial.

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Some Softbank watchers were expressed surprise at the move as Son, one of the best-known and most-colorful Japanese businessmen, was known for bold acquisition moves in the technology and communications arena. The three founders became billionaires when the fund went public in 2007, raising US$634.3 million in the first initial public offering by a private-equity firm. The company will continue to operate from its headquarters in NY and as an independent business within Softbank. The firm has done this by way of publicly traded permanent capital vehicles such as New Senior Investment Group and Fortress Transportation and Infrastructure Investors (FTAI). "We are very pleased to announce an agreement setting our business on a great path forward as part of SoftBank, while creating significant value for our shareholders. We anticipate substantial benefits for our investors and business as a whole, and we have never been more optimistic about our prospects going forward".

This deal will help the bank to fund startups with private equity cash instead of debt. However, the deal is subject to approvals by Fortress shareholders, certain regulatory approvals and other customary closing conditions.

Rachael Levy contributed reporting.