Softbank and Sprint officially confirm plans for 70% buyout of Sprint
Early this morning, Sprint and Softbank held a press conference in Japan to officially confirm that Softbank will be purchasing a majority stake in Sprint for $20.1 billion. The acquisition consists of Softbank purchasing $12.1 billion in current shares at $7.30 per share, and the issuance of $8 billion worth of new shares. Following this acquisition, a newly formed company will emerge – New Sprint – of which Softbank will own 70%, and other shareholders will own 30%.
The boards of directors of both companies have already approved this transaction, which means that only current shareholders and regulatory bodies will have to approve this still. Dan Hesse will stay on as Sprint’s CEO, and as a member of the board of directors, and Sprint is also not required to take any additional action with Clearwire. Additionally, New Sprint’s headquarters will remain in Kansas.
Perhaps most significantly, this deal with give Sprint a much-needed cash infusion to the tune of $8 billion, which will allow Sprint to speed up its deployment of LTE. This extra cash might also be used for more acquisitions of smaller mobile operators and spectrum. In other words, this is a great day for Sprint, and there are almost no reasons for Sprint’s current shareholders to vote against this deal.
The deal is expected to be fully closed by mid-2013.[Sprint]