UPDATE 4-Sumitomo to launch $1.4 bln offer for J:Com stake

* Sumitomo to pay $1.4 bln to raise J:Com stake

* Aims for 40 pct in cable TV company, from 27 pct now

* KDDI also planning to take J:Com stake (Adds details, comment from news conference)

By Nobuhiro Kubo and Yumiko Nishitani

TOKYO, Feb 15 (Reuters) - Sumitomo Corp (8053.T) said it will launch a 122.1 billion yen ($1.4 billion) tender offer to raise its stake in cable TV company Jupiter Telecom 4817.Q to 40 percent, countering a rival bid by telecoms firm KDDI (9433.T).

Sumitomo, Japan's third-largest trading company, now holds about a 27 percent stake in Jupiter, known as J:Com, and would become the top shareholder. By taking more than a third of the company, it would also gain the right to veto critical decisions.

The move could be an attempt to oppose a similar bid by KDDI to become the company's top shareholder, one analyst said.

KDDI, Japan's second-largest mobile telecoms firm, said in January it would pay $4 billion for the nearly 38 percent stake held by international cable TV group Liberty Global (LBTYA.O), currently J:Com's top shareholder.

"For KDDI, this is another problem. As Sumitomo is aiming to become the largest shareholder of J:Com, this does not seem to follow the usual Japanese way in which different stakeholders try to get along well together," said Atsuo Takahashi, a telecoms analyst at Mizuho Securities in Tokyo.

"You could say that this offer is hostile to KDDI."

KDDI last week scaled back the bid due to regulatory pressure. It said it would pay the same amount for a 31 percent stake, with the remainder to be held in trust accounts.

Sumitomo's offer of 139,500 yen per share represents a 55 percent premium on J:Com's closing price of 90,000 yen on Monday. It is still below the 140,000 yen offered by KDDI.

J:Com said in a statement that it would announce a decision after studying the offer.

LEADERSHIP POSITION

Sumitomo's managing executive officer, Yoshio Osawa, told a news conference the trading company was not looking to usurp KDDI's bid, but to retain leadership of J:Com, whose top management have been dispatched from Sumitomo.

"We see J:Com as a company that will generate steady profit over the long term. And we believe we can support J:Com's expansion," Osawa said.

A KDDI spokesman, Keiichi Sakurai, declined to comment on Sumitomo's offer.

"Our aim is not to be the largest shareholder of J:Com, but just to bolster our fixed-line business," he said.

Sumitomo said in a statement that Goldman Sachs (GS.N) is advising it on the deal.

Shares of J:Com closed down 3.1 percent before the announcement while Sumitomo Corp fell 2.3 percent. KDDI shares ended little changed. ($1=90.05 Yen) (Editing by David Dolan and Chris Gallagher)