Thread: Japan's Softbank in talks to acquire Sprint Nextel for $19 BILLION

Japan's Softbank in talks to acquire Sprint Nextel

By Salvador Rodriguez
October 11, 2012, 9:56 a.m.

Sprint Nextel is in talks with Japan's Softbank Corp. for a possible takeover that would give the nation's third-largest carrier much-needed financial support to build out its high-speed LTE network and better compete with Verizon and AT&T.

The deal could be worth as much as $19 billion, according to the Associated Press, and result in Softbank acquiring a 75% stake in the Kansas-based carrier, according to the New York Times.

Sprint confirmed the ongoing talks with Japan's third-largest carrier Thursday in a statement.

“Although there can be no assurances that these discussions will result in any transaction or on what terms any transaction may occur, such a transaction could involve a change of control of Sprint. Sprint does not intend to comment further unless and until an agreement is reached,” Sprint said.

The deal appears to be a reaction to T-Mobile's decision last week to agree to merge with MetroPCS.

There had been reports that Sprint was preparing a counterbid for MetroPCS, but on Wednesday Bloomberg said Sprint had decided to hold off on that bid. That now appears to be a result of the company's talks with Softbank.

Sprint's share price is at $5.72 and up more than 13% Thursday.

Japan's Softbank in talks to acquire Sprint Nextel - latimes.com

SoftBank - Wikipedia, the free encyclopedia

en.wikipedia.org/wiki/SoftBank

SoftBank Corp. (ソフトバンク株式会社, Sofutobanku Kabushiki-gaisha) is a Japanese telecommunications and Internet corporation, with operations in broadband, ...

Japanese billionaire Masayoshi Son makes $20 Billion bet on US smartphone boom

Japan’s second-richest man is making a $20bn (£12bn) bet that Americans’ love affair with smartphones is just beginning, after his company, Softbank, agreed to buy a majority stake in US mobile phone company Sprint.

By Richard Blackden
9:22PM BST 15 Oct 2012

Masayoshi Son, who founded Softbank and still owns a 21pc stake in the mobile-phone operator, insisted that the gamble is one the company has to make given sales are slowing in Japan.

“It is not an easy path to go,” Mr Son said on Monday in Tokyo. “But without taking on a challenge, we may end up facing bigger risks.” The deal will see Softbank, Japan’s third-largest mobile phone operator, pay Sprint shareholders $12bn for a 70pc stake. Softbank will also inject $8bn into Sprint, which has been struggling to win customers from US market leaders AT&T and Verizon.

Although Mr Son’s appetite for risk has helped generate his estimated $7.8bn fortune and ensure he stands out in corporate Japan, Softbank shareholders took fright at the deal. Shares in the company ended down 5.7pc yesterday after tumbling 12pc on Friday, when speculation about the purchase surfaced. Investors are concerned the combined company, which will be the third-largest mobile-phone company in the world, will be saddled with too much debt. Softbank is already carrying debt used to fund its 2006 purchase of Vodafone’s Japanese business, while Sprint has about $15bn of debt.

Dan Hesse, the chief executive of Sprint, said that there “couldn’t be a better time for this injection of cash.” Despite the sharp fall in Softbank shares, some analysts said that the cash should allow Sprint to accelerate the expansion of its faster 4G network across the US.

What’s clearer, though, is that one of Japan’s best-known businessman expects the explosive popularity in the US of smartphones such as Apple’s iPhone and Samsung’s phones to continue. As sales have risen in America, in Japan they have slumped 27pc to 38m over the last five years, according to research firm IDC.

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Mr Son, who left Japan to go to high school in the US and graduated from the University of Berkeley in California, acknowledged the risks involved in the deal. “It could be safe if you do nothing, and our challenge in the US is not going to be easy at all,” the billionaire said.

The acquisition is the biggest yet in a wave of deals that have seen Japanese companies strike a record number of overseas deals this year. Taking advantage of the strength of the yen, corporate Japan has made $65bn worth of foreign takeovers this year, according to Dealogic. Until yesterday, the largest deal was Japan Tobacco’s $19.1bn swoop on Britain’s Gallaher Group in 2006.

Japanese billionaire Masayoshi Son makes $20bn bet on US smartphone boom - Telegraph