CORRECTED - Softbank unlikely to derail Microsoft-Yahoo bid

(Corrects paragraph 12 to read "...a sweeter bid from Microsoft.," not from Softbank)

By Mayumi Negishi

TOKYO, Feb 14 (Reuters) - Japanese Internet firm Softbank Corp (9984.T: Quote, Profile, Research), under pressure from both sides in Microsoft Corp's (MSFT.O: Quote, Profile, Research) bid for Yahoo Inc (YHOO.O: Quote, Profile, Research), may hold out for more leverage but is unlikely to derail the bid.

Softbank, which has capital ties with both bidder Microsoft and target Yahoo, theoretically could block a transfer of shares in Yahoo Inc's Asian earnings driver Yahoo Japan Corp (4689.T: Quote, Profile, Research), owned 41 percent by Softbank and 33 percent by Yahoo Inc.

That could throw a wrench into the top software maker's unsolicited $31-per-share bid for Yahoo, analysts say.

"Whoever controls Asia, controls the world," Softbank's President Masayoshi Son told reporters last week. "Yahoo's Asia business are strong attractions for Microsoft."

Japan is one of the few places in the world where Yahoo outpaces giant Google Inc (GOOG.O: Quote, Profile, Research) in Internet traffic.

Under an agreement with Yahoo Inc, Softbank can veto any sale or purchase by Yahoo Inc of Yahoo Japan shares, according to Yahoo Japan's financial documents. That could affect a transfer of Yahoo Japan shares to Microsoft.

A similar agreement could also exist in China's top e-commerce site Alibaba.com Ltd's (1688.HK: Quote, Profile, Research) parent, in which Yahoo has a 39 percent stake to Softbank's 33 percent. Yahoo also holds a 1.2 percent stake in Alibaba.com.