Light Reading

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
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.




Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Dr. Dong Sun Talks About Carriers' Digital Transformation & Huawei’s Telco OS

1|29|15   |   6:28   |   (0) comments


Dr. Dong Sun, Chief Architect of Digital Transformation Solutions at Huawei, discusses how telecom operators can become digital ecosystem enablers and deliver optimal user experiences that are in real-time, on-demand, all-online, DIY and social (ROADS).
LRTV Huawei Video Resource Center
Huawei's Chief Network Architect Talks about Network Experience & Operators’ Strategies

1|29|15   |   3:39   |   (0) comments


In the digital age, network experience has become the primary productivity especially for telecom operators. In this video, Wenshuan Dang, Huawei’s Chief Network Architect, discusses how carriers can tackle the challenge of infrastructure complexity in order to enhance business agility and improve user experience.
LRTV Documentaries
The Rise of Virtual CPE

1|27|15   |   01:38   |   (5) comments


As NFV strategies evolve from tests and trials to production telco networks, expect to hear a lot about virtual CPE (customer premises equipment) rollouts during 2015.
LRTV Documentaries
Optical Is Hot in 2015

1|23|15   |   01:56   |   (2) comments


Optical comms technology underpins the whole communications sector and there are some really hot trends set for 2015.
LRTV Custom TV
Policy Control in the Fast Lane

1|22|15   |   2:57   |   (0) comments


What's making policy control strategic in 2015 and beyond? Amdocs talks with Heavy Reading's Graham Finnie about the key factors driving change in the data services landscape. Find out what his policy management research reveals about the road ahead for policy control – and sign up for
LRTV Documentaries
Highlights From the 2020 Vision Executive Summit

1|21|15   |   4:33   |   (2) comments


In December 2014, Light Reading brought together telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Cisco's Doug Webster shared his company's ...
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Harmonic, Helping Carriers Accelerate 4K Video Deployment with Huawei

1|20|15   |   5:42   |   (1) comment


At IBC, Peter Alexander, Senior Vice President & CMO at Harmonic, speaks about the growing interest in pay-TV service and its branching into multiple devices.
LRTV Huawei Video Resource Center
Sony Marketing Director Olivier Bovis Discusses the Outlook for 4K and Cooperation With Huawei at IBC 2014

1|20|15   |   6:50   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Envivio, Helping Carriers Accelerate 4K Video Deployment

1|20|15   |   2:57   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Pay-TV's Networked Future

1|20|15   |   6:29   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about the future of the pay-TV industry and its transition.
LRTV Huawei Video Resource Center
Jeff Heynen: Distributed Access Will Help MSOs Compete in the Future

1|20|15   |   2:26   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about moving to distributed access and the future trend of cable business.
LRTV Interviews
Cisco Talks Transformation

1|20|15   |   13:02   |   (0) comments


In December 2014, Steve Saunders sat down with Cisco VP of Products & Solutions Marketing Doug Webster at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Cisco's approach to network virtualization as well as how service providers can begin to monetize high-capacity networks through the end of the decade.
Upcoming Live Events
February 5, 2015, Washington, DC
February 19, 2015, The Fairmont San Jose, San Jose, CA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
September 9-10, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
December 1, 2015, The Westin Times Square, New York City
December 2-3, 2015, The Westin Times Square, New York City
Infographics
Hot Topics
Google Continues Gigabit Expansion
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/27/2015
Comcast Apologizes to 'A**hole' Brown
Mitch Wagner, West Coast Bureau Chief, Light Reading, 1/29/2015
US Ops Spend $32.5M to Bring 4G to Chicago's Subways
Sarah Thomas, Editorial Operations Director, 1/30/2015
Cablevision's New WiFi Try – Freewheeling Enough?
Mari Silbey, Independent Technology Editor, 1/26/2015
Overture Builds on NFV Foundation
Mitch Wagner, West Coast Bureau Chief, Light Reading, 1/27/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Weekly Executive Interview
Join us live for Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, and Universal, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he has to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.