Softbank Secures T-Mobile Shares Worth $7.6 Bln

(RTTNews) - Telecom service provider SoftBank Group Corp. (SFTBY), on Wednesday, announced that it would receive 48.75 million shares of T-Mobile US worth $7.6 billion at no additional cost.

SoftBank acquired Sprint Corporation in 2013. It was later merged with T-Mobile US, Inc. on April 1, 2020. The Japanese company was promised shares of T-Mobile as consideration upon meeting certain conditions of the merger agreement.

With the transaction, the company expects to boost its listed assets by doubling its T-Mobile U.S. stake to 7.64% from the current rate of 3.75%. It also increases SoftBank's internal rate of return on its Sprint investment to 25.5%.

"This increases the proportion of listed, measurable equity in hand on (SoftBank Group's) balance sheet, and, even better, proportions of marginable equity relative to indebtedness," Macquarie analyst Paul Golding wrote in a client note.

The transaction brings a sense of relief to SoftBank, from failures and losses of the past few years. Its startup WeWork went bankrupt. Its investment of $375 million in Zume Pizza burned out when the pizza company went out of business.

T-Mobile is headquartered in Seattle and its largest shareholder is Deutsche Telekom AG. As per the third quarter of 2023 report, it has 117.9 million subscribers.