Shares in Nippon Broadcasting System Inc. plunged Monday following a three-day rally as investors anticipate a prolonged takeover battle between Livedoor Co. and Fuji Television Network Inc.

The shares, listed on the Second Section of the Tokyo Stock Exchange, closed at 6,880 yen, down as much as 960 yen, or 12.24 percent, from Thursday's close.

The stocks had climbed for three consecutive sessions through Thursday after Livedoor's surprise announcement Tuesday that the Internet service provider had acquired a 35-percent stake in the radio broadcaster.

The gain was partly due to investor speculation that Fuji TV, which owns about 12 percent of Nippon Broadcasting and is attempting to buy additional shares in a tender offer, may be prompted to raise its offer price of 5,950 yen per share.

Shares of Nippon Broadcasting temporarily hit 8,800 yen on Thursday. Japanese stock markets were closed Friday for a national holiday.

But it was a different story Monday. Many investors dumped the stocks because Livedoor and Fuji TV are at loggerheads and because Fuji TV appears to be sticking to its original offer price, traders and analysts said.

On Sunday, Livedoor President Takafumi Horie suggested he may acquire a controlling stake in Nippon Broadcasting and have the radio broadcaster issue new shares to dilute Fuji TV's stake.

The comment was in response to countermeasures announced by Fuji TV on Friday to neutralize Livedoor's influence over the TV network. Nippon Broadcasting is Fuji TV's top shareholder with a 22.5-percent stake.

The countermeasures include lowering the minimum number of Nippon Broadcasting shares the TV network plans to purchase to a little over 25 percent from the original target of more than 50 percent.

Under Commercial Code provisions, if Fuji TV controls more than 25 percent of Nippon Broadcasting, the radio broadcaster will not be able to exercise its voting rights in its cross-shareholding partner Fuji TV.

Fuji TV's equity stake would fall below 25 percent, however, should Livedoor bolster Nippon Broadcasting's capital through a new share issuance and raise the denominator used to calculate the stockholding.

Horie has also said Livedoor was considering having Nippon Broadcasting buy more than 25 percent of Fuji TV-which would in turn nullify Fuji TV's voting rights in Nippon Broadcasting.(IHT/Asahi: February 15,2005)