Thursday June 27, 2013
Sprint shareholders pave way for takeover of US mobile carrier
TOKYO: Investors in Tokyo have welcomed news that shareholders in US mobile carrier Sprint had approved a US$21.6bil takeover by SoftBank, paving the way for the biggest-ever overseas buyout by a Japanese firm.
The vote in the United States on Tuesday clears one of the last major hurdles following a hard-fought acquisition battle that saw the Japanese firm hike its initial US$20bil offer by US$1.6bil.
The deal, which will see SoftBank take a 78% stake in Sprint, was approved with 80% of the US firm's outstanding voting shares, a statement said.
“It is not certain how SoftBank is going to fare in this venture, but it's a way for them to expand the business and, in that sense, it should be viewed as a positive,” said Toshihiko Matsuno, senior strategist at SMBC Friend Securities.
SoftBank jumped as much as 4.2% to 5,660 yen (US$58) in opening Tokyo trade before finishing the day at 5,420 yen, down 0.18% on profit-taking while the broader Tokyo market turned down more than 1%. The firm's shares have almost doubled since deal was first reported in October.
Sprint shares initially jumped 1.9% to US$6.99 on the news before ending 0.29% higher in New York.
Completing the merger still requires approval from the Federal Communications Commission (FCC) but Sprint said in a statement the two firms expected it to be consummated in early July.
“We are grateful that many Sprint shareholders supported our plan,” SoftBank said after the vote.
“From now on we plan to complete procedures of the deal swiftly on approval by the FCC.”
Sprint chief executive Dan Hesse said that “today is an historic day for our company“.
“The transaction with SoftBank should enhance Sprint's long-term value and competitive position by creating a company with greater financial flexibility,” he added.
SoftBank had targeted Sprint, a distant third in US wireless services after AT&T and Verizon, as a way to gain entry into the lucrative US market. The fresh capital is expected to help Sprint compete against its larger rivals.
But the Japanese company's efforts ran into competition from Dish Network, which forced SoftBank to increase its offer. However, Dish last week abandoned its US$25.5bil bid.
The Sprint vote comes days after SoftBank's flamboyant founder Masayoshi Son told investors that he was aiming to turn what is now Japan's third largest telecom company into a global behemoth that outpaces the likes of ExxonMobil, JPMorgan and Apple.
“We will become the world's number-one company at any cost - in terms of profit, cashflows and stock value,” the 55-year-old telecom billionaire told SoftBank's annual meeting in Tokyo on Friday.
SoftBank was largely unknown outside Japan before the Sprint deal was announced, but at home it is widely seen as the most dynamic of the country's three-dominant mobile operators.
Its quirky television commercials feature a talking snow white dog and appearances by US actor Tommy Lee Jones.
The company was the first among its rivals to carry Apple's popular iPhone in Japan.
SoftBank's holdings include a professional Japanese baseball team and Son is now one of the country's richest men, worth an estimated US$9.1bil, according to Forbes.
SoftBank's cross-ocean deal won clearance from US national security officials in May under the condition of the appointment of an independent member to the Sprint board of directors to serve as security director. - AFP