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SoftBank raises Sprint Nextel offer to $21.6bn

Dish can place a ‘best and final offer’ until 18 June.

The Japanese telecom operator SoftBank Corp. has raised its offer for the US wireline and wireless carrier Sprint Nextel Corporation by 7.5 per cent to $21.6bn to put an end to competing bid from Dish Network Corporation.

Under the amended merger deal, SoftBank will provide an additional $4.5bn of cash to Sprint stockholders at closing, bringing the total cash consideration available to Sprint stockholders to $16.64bn, in an effort to deliver greater cash consideration and increased certainty to Sprint stockholders.

The $4.5bn of additional cash at closing will be funded by a reallocation of $3bn of SoftBank’s earlier  proposed $4.9bn primary investment in New Sprint and by $1.5bn of incremental capital from SoftBank.

The new deal will give SoftBank  78 per cent equity in Sprint. According to the two companies, the deal may close in July.

Masayoshi Son, chairman and CEO of SoftBank, said: “The amended agreement announced today delivers more upfront cash to Sprint stockholders, while still achieving our goal of creating a well-capitalized Sprint that is better positioned to bring meaningful competition to the US market.”

Son added: “Our transaction offers significant value for Sprint stockholders and the opportunity to realize that value in just a few weeks, without the risks associated with any other potential transaction.  We look forward to working with the Sprint management team to accelerate the build out of a nationwide LTE network, increase competition in the US market and drive subscriber growth in the years ahead.”

Meanwhile, Sprint’s special committee and board of directors have determined that the proposal submitted by Dish Network on 15 April 2013 was not  likely to lead to a superior offer.

Dish will be provided an opportunity to place its ‘best and final’ offer before 18 June 2013 for the completion of deliberations by the Special Committee and notice to SoftBank.

Larry Glasscock, chairman of the special committee of the Sprint board of directors, said: “As amended, the SoftBank transaction provides a significant cash premium, maximizes value and certainty for Sprint stockholders, and enhances Sprint’s long-term value by creating a company with an improved balance sheet, greater financial flexibility and a stronger competitive position.

“The amended agreement allows Sprint shareholders to receive substantial cash and to begin to participate in Softbank upside on an expedited and low-risk basis. We believe this preserves the timing and closing certainty of the original Softbank transaction.”