Softbank Raises Sprint Bid to $21.6 Billion

New Deal Means More Cash for Shareholders

Japanese wireless giant SoftBank raised its bid for Sprint Nextel to $21.6 billion, a deal that could put more cash in Sprint shareholders hands.

According to its latest proposal on June 10, SoftBank would pay $7.65 per share for Sprint, up from the $7.30 per share it originally offered.

Softbank will continue to invest $1.9 billion in New Sprint at closing, which in addition to the $3.1 billion convertible debt investment made by SoftBank in October 2012, brings SoftBank’s total investment in Sprint to $5.0 billion. 

Sprint’s Special Committee and Board of Directors have unanimously determined that the proposal submitted by Dish Network on April 15 is not reasonably likely to lead to a “superior offer” under the Merger Agreement. Sprint has engaged with Dish since April 15 and, after receiving waivers from SoftBank under the Merger Agreement, allowed Dish due diligence to commence on May 21.  Despite the Special Committee’s diligence, Dish has not put forward an actionable offer.  As a consequence of the lack of progress with Dish and the improved terms from SoftBank, the Special Committee ended its discussions with Dish and will request that Dish destroy all of the Sprint confidential information made available in the course of its diligence.

“The amended agreement announced today delivers more upfront cash to Sprint stockholders, while still achieving our goal of creating a well-capitalized Sprint that is better positioned to bring meaningful competition to the US market,” said SoftBank Chairman and CEO, Masayoshi Son in a statement.  “Our transaction offers significant value for Sprint stockholders and the opportunity to realize that value in just a few weeks, without the risks associated with any other potential transaction.  We look forward to working with the Sprint management team to accelerate the build out of a nationwide LTE network, increase competition in the US market and drive subscriber growth in the years ahead.”

Chairman of the Special Committee of the Sprint Board of Directors, Larry Glasscock, said, “As amended, the SoftBank transaction provides a significant cash premium, maximizes value and certainty for Sprint stockholders, and enhances Sprint’s long-term value by creating a company with an improved balance sheet, greater financial flexibility and a stronger competitive position.  The amended agreement allows Sprint shareholders to receive substantial cash and to begin to participate in Softbank upside on an expedited and low-risk basis.  We believe this preserves the timing and closing certainty of the original Softbank transaction.”

Glasscock continued, “We have expended substantial time and energy engaging with Dish over the past nine weeks, including an extensive due diligence process, but these efforts did not lead, in the Special Committee’s view, to a proposal that was reasonably likely to lead to a proposal superior to SoftBank’s.”  

The revised merger agreement creates a deadline of June 18 for Dish to provide its ‘best and final’ offer and for the completion of deliberations by the Special Committee and notice to SoftBank.

In a statement, Dish said, "We continue to believe that Sprint has tremendous value. We will analyze the revised SoftBank bid as we consider our strategic options."