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Shares of Vodafone (VOD) have been on fire since last Friday morning on rumor of a buyout of its Japan unit by Masayoshi Son's Softbank. Softbank itself gained 3.63% earlier today in Japan (and was up as much as 6.34% in intra-day trading) as investors seemed to welcome the idea of Softbank as a new entrant and competitor against NTT DoCoMo (DCM) and KDDI.

Softbank was due to enter the mobile phone business as one of three new entrants that were granted permission by the government last year. A potential acquisition of Vodafone means Softbank could jump right in instead of having to build up a network and consumer base. If Vodafone is lucky, Softbank will be too aggressive and overpay. A possible price range sits at between 1 (US$8.6b) and 2 trillion yen (US$17.2b), with the latter amount being an approximation of book value. DoCoMo and KDDI will have less to worry about if Softbank overpays but regardless must still be careful because the Vodafone brand will certainly be re-branded to reflect a more household name and synergies will be created using the 42% stake Softbank owns in hugely successful and popular Yahoo! Japan.

The following is from a post I made last Thursday entitled, "Is Vodafone Japan Dead?"

As far as I am concerned “Vodafone is dead

Source: DoCoMo and KDDI Down on Potential Vodafone Exit & Softbank Entry (DCM)