Sprint Shareholders Approve $21.6 Billion Acquisition by SoftBank

June 27, 2013 10:05 by Clayton Reeves in M&A, Telecom  //  Tags:   //   Comments (0)

After nearly eight months of drama and deal making worthy of its own television series, Sprint investors have agreed to be acquired by SoftBank for $21.6 billion.  Softbank has the majority of regulatory approvals in line, although they still need to be cleared by the FCC (Federal Communications Commission).

This deal seemed done in late 2012, when SoftBank made an offer of $20.1 billion for  70 percent of the company.  However, Dish came in with a  $25.5 billion offer for Sprint in April, although the terms were rumored to be more restrictive and less appealing to Sprint.  Sprint also has mentioned that the bid was never firm enough to be considered “actionable.”  To seal the deal, SoftBank raised its bid to $21.6 billion for 78 percent of Sprint on June 10.  Sprint set a date of June 18th for Dish to respond, and although Dish protested the time line, they subsequently withdrew their bid.  Sprint was also competing with Dish in their bid for affiliate Clearwire.  Dish dropped their bid for Clearwire after Sprint raised their price to $5/share.  Thus, the way was clear of major obstacles and the two sides were able to get a deal done.

This appears to be good news for Sprint, as SoftBank’s Chief Executive Masayoshi Son has performed a similar turnaround on Vodafone and has extensive experience in the telecom sector.  He is appalled at the lack of speed in the US wireless marketplace, which he says lags Japan by 30-40%. 

It will be interesting to see what changes come to Sprint, and the excitement surrounding the company is a welcome change from the struggles they’ve encountered since the Nextel merger.

(Information above sourced from Bloomberg, WSJ and Reuters)

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