Softbank has lifted its bid by $1.5 billion to offer $21.6 billion, and also increased the cash part of the bid by $4.5 billion, which consequently will give investors an extra $1.48 per share for the total cash payout of $5.50 each.
Paulson & Co, Sprint’s second largest shareholder said it would now vote in favour of the Softbank bid because of “improved financial terms”, according to the Financial Times.
The long-running saga, which began in October 2012 after Softbank struck an agreement to acquire a 70% stake in Sprint, appears to be coming to an end. Masayoshi Son’s Japanese telecoms group faced a rivaling offer from US satellite TV provider Dish Network at the 11th hour, and the deal caused friction between the two groups. Softbank attempted to intimidate banks not to fund Dish’s bid, while Dish argued that Softbank’s entrance into the US market would be a direct threat to national security.
Sprint has now reportedly ended its discussions with Dish, but has left the company with one week to make its final offer, which will have to be fully financed.
It has also increased the break fee payable to Softbank from $200 million to $800 million.
Son, chief executive and chairman at Softbank, said the revised offer “delivers more upfront cash to Sprint stockholders, while still achieving our goal of creating a well capitalised Sprint that is better positioned to bring meaningful competition to the US market”.
Under the new proposal, Softbank will now acquire 78% of Sprint, and will make upgrades to Sprint’s network worth $3 billion, in additional to committing to a $1.5 billion cash investment.
Sprint has adjourned its planned special meeting of shareholders from June 12 to June 25 to allow for further assessment of the revised bid.
