SoftBank Agrees To Buy 70% Of Sprint

Posted Oct 14, 2012

Earlier this month, I wrote about how SoftBank was in talks to buy-out Sprint.  Those talks have advanced and now SoftBank and Sprint have reached a deal.  SoftBank will pay Sprint $20 billion for a 70% stake.  The deal is expected to close by tomorrow morning.  The boards of both companies have agreed to the terms.

SoftBank will buy $8 billion worth of shares directly from Sprint at a price of $5.25 each and tender for another $12 billion worth of shares from existing shareholders at $7.30 per share.  Because of the structure of the deal, they will not need a shareholder vote.

The equity is being purchased directly by SoftBank with a $3 billion convertible bond purchase that is exercisable at $5.25 and will be sold before the deal is closed.  This way Sprint will have funds to deal with certain debt maturities at the parent and at the 48% owned Clearwire.