That price values SoftBank’s T-Mobile stake at over $31 billion.
Alex Kraus/BloombergThe largest portion of SoftBank Group’s divestment of its T-Mobile US stake will proceed at a price of $103 per share. The Japanese conglomerate, which owns about a quarter of the U.S. wireless company, is seeking to divest tens of billions of dollars of assets this year to pay down debt and repurchase shares.
The multipart divestment includes a secondary offering in which T-Mobile (ticker: TMUS) will sell new shares to institutional investors this Friday and repurchase an equivalent number of shares from SoftBank (9984.Japan) at $103 each.
That price values SoftBank’s T-Mobile stake at over $31 billion. It represents a 3.8% discount to T-Mobile stock’s $107.16 record-high closing price on Tuesday. The shares were down 0.3% on Wednesday morning, to $106.87, versus a 0.6% fall for the S&P 500 index. SoftBank stock fell 1.8% in Tokyo.
SoftBank received its T-Mobile stake when it completed an all-stock takeover earlier this year of Sprint, in which SoftBank had been the largest shareholder. Friday’s offering also includes a sale of T-Mobile shares to Sprint’s former CEO and current SoftBank Chief Operating Officer Marcelo Claure, a rights offering to existing shareholders, and shares sold to a trust vehicle. Altogether, those sales represent about two-thirds of SoftBank’s T-Mobile shares.
Deutsche Telekom (DTE.Germany)—which already holds about 44% of T-Mobile—will receive call options from SoftBank to purchase the remainder of its stake within four years.
SoftBank will pay T-Mobile $300 million for facilitating the secondary offering later this week. The sale should have little impact on T-Mobile in the long run: Its total share count will be unchanged, and there won’t be any impact on its operations or strategy. Deutsche Telekom already had effective majority control via previous proxy agreements.
And adding the majority of SoftBank’s stake to T-Mobile stock’s public float should increase liquidity and remove the uncertainty of the pending sale. Barron’s recommended buying T-Mobile shares earlier this year, citing its 5G opportunity and the benefits of its merger with Sprint.
Write to Nicholas Jasinski at nicholas.jasinski@barrons.com
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June 24, 2020 at 09:31PM
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SoftBank Sale of T-Mobile Stake Prices at $103 Per Share - Barron's
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