Fuji Television Network, Inc. Announces Notice of Commencement of Tender Offer

Business Wire, Jan 17, 2005

TOKYO -- Fuji Television Network, Incorporated (Tokyo Stock Exchange:4676) ("the Offeror") gives notice hereby that its Board of Directors resolved at its meeting today to acquire shares of Nippon Broadcasting System, Incorporated (Tokyo Stock Exchange:4660) ("the Target").

1. Purpose of Tender Offer

The Offeror, which currently owns 12.39% (4,064,660 shares) of the total issued shares of the Target, is conducting this tender offer for the purpose of obtaining management control over the Target through the acquisition of all of the issued shares of the Target (excluding the treasury stocks owned by the Target).

With the rapid progress of digitalization in the business environment surrounding the world of broadcasting, the integration of broadcasting and other forms of communications has accelerated. In order to adapt to this changing business environment, we must clearly understand and analyze the development of technologies and market needs and establish a new business model free from pre-conceived ideas.

Although the Offeror and the Target have a history of cooperation, they have managed their companies separately and, based on independent management policies and strategies, have established their respective positions as leaders in the world of television and radio broadcasting. However, we believe that in order to continue to successfully compete in the media business of the 21st century, there is an urgent need to adopt a group management system that enables flexible and efficient implementation of the "selection and concentration" of operating resources of the group, supported by the capital policies of the entire group rather than those of the individual companies.

Furthermore, from the viewpoint of the shareholding relationships, we consider that it is necessary for the group to establish a long-lasting and stable management system, since the group operates in the highly public business of mass media and there will be a continuous need to carry out the group's social mission and responsibilities.

The obtainment of management control over the Target through this tender offer is the first step towards the Offeror's aim to establish a new group management system in which the Offeror will be the core entity in the future.

The planned outline of the future capital strategies and finance strategies of the group are as follows:

(Capital Strategies)

(i) To implement a capital reorganization involving affiliates toward achieving flexible and effective group management.

(ii) Concurrently with the capital reorganization, to review the business allocation among the current group companies and to implement business restructuring to maximize group synergies.

(iii) To actively promote alliances (capital alliances as well as business alliances) with outside companies in new and related areas.

(Finance Strategies)

(i) To improve return on assets by enhancing the efficient use of funds and assets through efficient group management.

(ii) To increase our current net income per share and to improve return on equity by managing the aggregate number of issued shares.

(iii) To raise shareholder value through a review of the dividends policy, leading to possible enhanced returns to shareholders.

In addition, the business strategies of the Offeror itself remain as follows:

(i) To strengthen its business base as a "media complex" by placing digital terrestrial broadcasting as its core media while also promoting the use of new broadcasting media, such as BS and CS, as well as communications media, such as broadband and mobile.

(ii) To enrich its "digital content factory" by providing attractive and high-quality contents essential to the operation of a media complex.

(iii) To strengthen the business base of the FNN network structure as it faces digitalization and to achieve a more solid competitive advantage over other networks.

(iv) To continue reinforcement of businesses other than broadcasting, such as businesses related to movies, events, intellectual property rights, etc., which have been successful thus far.

Furthermore, the Offeror will consider reorganizing the radio operating department of the Target and starting new businesses following the obtainment of management control over the Target through this tender offer and mutual consultations between the Offeror and the Target.

For the purpose of effectively competing in the media industry of the 21st century, the Offeror will strengthen the business base of the whole Fuji-Sankei group and vigorously work toward establishing one of the strongest media groups in Japan with a global outlook.

The purchase price of this tender offer, 5,950 yen, has a premium of approximately 21 % over the average closing price of shares of the Target on the Tokyo Stock Exchange, Second Section during the three-month period ended January 14, 2005 (4,937 yen).

Shares of the Target, which are listed on the Tokyo Stock Exchange, Second Section, will possibly be delisted, depending on the results of this tender offer, since no maximum target ownership has been set for this tender offer. The Offeror will explore the possibility of making the Target its wholly owned subsidiary through a share exchange or otherwise in the future, in order to ensure the obtainment of management control over the Target.