& cplSiteName &

Softbank Eyes Sprint Acquisition

Ray Le Maistre
10/11/2012
50%
50%

Japanese network operator SoftBank Corp. is believed to be in advanced talks to buy a majority stake in Sprint Corp. (NYSE: S) for US$12.8 billion, reports Bloomberg, citing the Nikkei newspaper.

SoftBank is reportedly discussing a deal that would see it take a 66 percent stake in Sprint, the third-largest mobile operator in the U.S. with more than 56 million customers.

Softbank issued a statement saying: "The story about SoftBank and Sprint Nextel Corporation being reported is based on speculation. We have not announced anything. We do not comment on speculation."

The rumor will add to the current uncertainty about the future of the U.S. mobile market, as Sprint had allegedly been looking at a bid for MetroPCS Inc. (NYSE: PCS), which is currently on course to merge with T-Mobile US Inc. . (See Sprint Could Counter-Bid for MetroPCS and T-Mobile, MetroPCS to Merge.)

The latest speculation comes shortly after SoftBank announced its intention to acquire fellow Japanese service provider eAccess Ltd. in a deal valued at about $2.3 billion. That deal, if completed, will see eAccess, which has about 4.2 million customers, merge with SoftBank Mobile Corp. , the third-largest mobile player in Japan with more than 30 million customers.

For more on Sprint, see:



— Ray Le Maistre, International Managing Editor, Light Reading

(8)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
krishanguru143
50%
50%
krishanguru143,
User Rank: Light Beer
12/5/2012 | 5:19:20 PM
re: Softbank Eyes Sprint Acquisition




With someone looking into buying a stake into Sprint, I cannot see Sprint being able to acquire anyone at the moment.  I’m not sure Sprint could buy MetroPCS.  While they would need to beat $1.5 billion, Sprint only has around $6 billion in cash and financing the deal would add to their already $21+ billion in debt.  Their market cap is only $17 billion.




paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 5:19:17 PM
re: Softbank Eyes Sprint Acquisition


Ianbrown,


Confused on your comment and where it is going.  I assume you mean in opposition to:


http://www.lightreading.com/document.asp?doc_id=225526


seven


 

goundan
50%
50%
goundan,
User Rank: Light Beer
12/5/2012 | 5:19:17 PM
re: Softbank Eyes Sprint Acquisition


How does Softbank majority ownership affect Sprint's US Gov contracts for telecom services? If they have to drop or spin off US Gov contracts due to Softbank majority ownership issues, then it is quite likely that Huawei gets its first tier 1 break in the US.

krishanguru143
50%
50%
krishanguru143,
User Rank: Light Beer
12/5/2012 | 5:19:16 PM
re: Softbank Eyes Sprint Acquisition




No I didn’t, they go hand in hand.  If Softbank is looking at buying a controlling interest stake in Sprint, Sprint cannot be making any acquisitions.  Whenever a company is in takeover mode, they freeze hiring, acquisitions, etc.  The buyer is looking through the books and the last thing they want to see is books in fluctuation.  It also would harm the existing shareholders as if Softbank bought a 66% stake in the company and it was valued at a pre-MetroPCS buyout/merger but Softbank still got 66% ownership after the acquisition, then the existing 34% got the shaft.  In essence, Softbank just increased the value of their ownership stake while the existing shareholders saw a dilution.  The only time I saw where an acquisition and a merger took place at the same time, Verizon Wireless.  Vodafone and Bell Atlantic were merging their operations to form Verizon Wireless and Bell Atlantic was also going to buy GTE.  So pre-GTE Vodafone would own 55% of the new Company with Bell Atlantic owning 45%.  After the GTE acquisition, Bell Atlantic would own 55% and Vodafone would own 45%.

 

So if Softbank and Sprint are talking, then MetroPCS is off the table.  Sprint cannot afford to buy anything, their financials can’t handle it.  If it was an all-cash deal, it would get rid of over 25% of their cash reserves.  If they financed it, it would add to their existing debt and would surely drop their credit rating.  Even an all cash deal could drop their credit rating.  A drop in their credit rating, lower cash reserves, etc. could also either make Softbank ask for a higher ownership stake or they will pay less for their 66% stake.  Sprint could really only go after MetroPCS is Softbank agrees to it, but then Sprint is going to have to beat the offer DT has on the table.  This would certainly push the price Sprint would pay up as a bidding war would start.  You also have the board supporting the current T-Mobile/MetroPCS deal.  If Softbank wanted Sprint and MetroPCS, they would be better off bidding for the two separately.  So at the end of the day, you won’t hear anything about Sprint and MetroPCS.




paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 5:19:16 PM
re: Softbank Eyes Sprint Acquisition


One would think that Verizon Wireless (with its part ownership by Vodaphone) and T-Mobile (DT) should be able to provide you guidance to the US government contracts with wireless carriers partly or fully owned by organizations in friendly (read not China) countries.


seven


 

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 5:19:15 PM
re: Softbank Eyes Sprint Acquisition


Well,  I do need to say my experience is different depending on the stage of the talking.  If they are in exclusive conversations, then yes talks with other parties are off the table.  If this is being floated as a trial balloon, then I would say Sprint could be talking to others.


For example, when AFC was bought by Tellabs we had just completed the Marconi NAA acquisition and in fact had our first round of Tellabs diligence done months before the Marconi deal.  We were talking to two other suitors than Tellabs but the Tellabs deal is the one that happened.  At that time, we were also talking to a COO (whose hire went on hold only after we had an LOI from Tellabs).  Normal front line hire/fire went on as normal during the entire process.  Only big things were put on hold.


Part of the reason is that bankers and companies approach management teams of reasonable companies all the time with deals.  Most of them are stillborn at the first discussion phase others actually have Corp Dev types talking and some of those move on to broader management discussions.  Only some of those move on to actual deal talks.  Until somebody ponies up a number its all foo foo.


seven


 

krishanguru143
50%
50%
krishanguru143,
User Rank: Light Beer
12/5/2012 | 5:19:15 PM
re: Softbank Eyes Sprint Acquisition




But since we are talking about Sprint that still hasn’t digested Nextel entirely.  Given that Sprint has confirmed the talks, they appear to be well underway and still a lot needs to be discussed.  If Sprint got into a bidding war and won though, their finances could not handle an acquisition.  There could also be a penalty from MetroPCS from not going through, which would certainly add to any price that Sprint would have to pay.




krishanguru143
50%
50%
krishanguru143,
User Rank: Light Beer
12/5/2012 | 5:19:15 PM
re: Softbank Eyes Sprint Acquisition




If Sprint did have to spin off the Gov’t contracts, I don’t Huawei would get a win.  The Gov’t could pull all funding for any public project that the non-Gov’t Sprint would be involved it.  Chances are, they would take the safe road and Huawei and ZTE would not be looked at as vendors.

 

Sprint does provide emergency responder service.  The Gov’t has a huge part of this service.  Sprint would see that business go away overnight; no public funding would be issued to them.




From The Founder
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
AT&T: Creating Dynamic Networks to Meet Business Needs

5|26|17   |   4:24   |   (0) comments


As enterprises need more dynamic networks, service providers need to deliver on-demand, virtual services to meet those needs. AT&T is creating a networking fabric to mix-and-match SDN technologies for enterprise customers, says Roman Pacewicz, AT&T senior vice president for offer management and service integration, in an interview at Light Reading's
LRTV Interviews
EdgeConneX on Industry Headwinds & Tailwinds

5|26|17   |   2:41   |   (0) comments


At Light Reading's Big Communications Event 2017, EdgeConneX CTO Don MacNeil discussed the value of partnerships in the digital world.
LRTV Documentaries
4 Steps Toward a Higher Network IQ

5|26|17   |     |   (0) comments


At the Big Communications Event in Austin, Texas, EXFO CEO Philippe Morin explains how sensors and analytics can boost a network's intelligence and enable on-demand customer experiences. Find more BCE 2017 coverage here.
LRTV Interviews
BT's McRae Sheds Light on 4K Strategy

5|25|17   |   4:45   |   (0) comments


At Light Reading's Big Communications Event 2017 in Austin, Texas, BT Group's Chief Network Architect Neil McRae talks about what it took for BT to broadcast live sports in 4K. Catch up with all our BCE coverage at http://www.lightreading.com/bce.asp.
From the Founder
How the NIA Aims to Advance NFV

5|25|17   |   08:07   |   (1) comment


Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
LRTV Custom TV
Better Solutions That Address Growing Scale

5|25|17   |     |   (0) comments


For Comcast, the X1 rollout and 17-fold increases in broadband speeds in the past 16 years are among factors driving the need for Energy 2020 solutions that reduce cost and consumption, says Mark Hess.
LRTV Custom TV
Ethernity Network Delivers Instant Offloading of Network Functions With All-Programmable Intelligent NIC

5|25|17   |     |   (0) comments


David Levi, CEO of Ethernity Networks, explains that programmability of the hardware makes the company's All-Programmable Intelligent NIC uniquely beneficial for communications service providers that need advanced data appliances with agile support of virtualization. Utilizing the company's patented network processing technology, Ethernity offers data path ...
LRTV Documentaries
BCE 2017: Vodafone Gets Obsessed With Cloud-Native

5|25|17   |     |   (0) comments


Vodafone's Matt Beal updates us on Project Ocean and explains why simple virtualization isn't enough of a goal for network transformation. Catch up with other BCE 2017 keynotes and news at http://www.lightreading.com/bce.asp.
LRTV Documentaries
BCE 2017: Intel's Take on Network Transformation

5|24|17   |     |   (0) comments


In this BCE 2017 keynote, Lynn Comp discusses Intel's vision for areas such as analytics, automation and service assurance. For more videos and BCE coverage, see http://www.lightreading.com/bce.asp.
LRTV Documentaries
Order From Chaos: The Steve Saunders BCE Keynote

5|24|17   |   17:27   |   (0) comments


Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability testing.
Think of this as the video sequel to the recent columns he's written about NFV and the prospect of a telecom app store. (See

LRTV Documentaries
Service Provider Panel: Partnering in the Digital Era

5|22|17   |     |   (0) comments


Coopetition has always been part of telecom, but the ecosphere now includes data centers, vendors, apps developers, cloud service providers and Internet content providers. This BCE 2017 panel explores the new attitudes among network operators as to the value and variety of ...
LRTV Interviews
Site Demo: AT&T's IoT Flow Platform

5|19|17   |   04:25   |   (0) comments


At AT&T's R&D center in Tel Aviv, Israel, project leader Eyal Segev talks about the operator's Flow platform and how it helps to prototype IoT applications.
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Cities Clamor for More Clout at FCC
Mari Silbey, Senior Editor, Cable/Video, 5/23/2017
What's Blocking 4K TV Today
Alan Breznick, Cable/Video Practice Leader, Light Reading, 5/22/2017
Sonus & Genband Finally Combine to Form $745M Company
Dan Jones, Mobile Editor, 5/23/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Animals with Phones
What Brogrammers Look Like to the Rest of Us Click Here
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.