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.