Softbank to Take 70 Percent Stake in Sprint for $20B

From DailyTech: We reported last week that Softbank Corp. (TYO:9984) was in talks to acquire Sprint Nextel Corp. (S) for an estimated transaction price of $12.8 billion. There were no details given on the potential acquisition or the timeframe for its completion.

Sprint only provided the press with the following statement:

Sprint today confirmed that it is currently engaged in discussions with Softbank regarding a potential substantial investment by Softbank in Sprint. 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.

Today, the news is official, and Softbank will pay $20 billion for a 70 percent share of Sprint. This is well above the $12.8 billion figure that was tossed around last week.

The $20 billion figure includes:

$8 billion in shares from Sprint ($5.25/share)
$12.1 billion in from current Sprint shareholders ($7.30/share)

The shareholders receiving over $12 billion in cash will get 30 percent ownership of the "New Sprint". Sprint, on the other hand, will use the $8 billion in cash to boost its LTE network.

“This transaction provides an excellent opportunity for SoftBank to leverage its expertise in smartphones and next-generation high speed networks, including LTE, to drive the mobile internet revolution in one of the world’s largest markets," said SoftBank Chairman and CEO, Masayoshi Son. "Our track record of innovation, combined with Sprint’s strong brand and local leadership, provides a constructive beginning toward creating a more competitive American wireless market.”

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