SoftBank has released a large chunk of its stake in T-Mobile US in a deal aimed at injecting $ 20 billion into the Japanese group while battling shareholder concerns about its corporate strategy.
The company will raise $ 14.8 billion in a share sale that was priced Tuesday, valuing T-Mobile shares in the United States at $ 103 each, according to three people briefed on the sale. The deal is the first in a series of transactions expected to give SoftBank $ 20.4 billion as it abandons most of its interests in the US telecommunications group. USA
SoftBank also agreed to sell its remaining US $ 10 billion stake in T-Mobile to Deutsche Telekom, the company’s largest shareholder. This side deal is structured as a call option that expires in four years, according to a filing with the US securities regulator. And it would give the German group majority ownership of T-Mobile US.
Tuesday’s sale represented a less than 4 percent discount to T-Mobile US closing price of $ 107.16, a record for the stock, which has gained more than 36 percent this year, while the US stock market in overall decreased slightly.
SoftBank declined to comment. T-Mobile US and Deutsche Telekom did not immediately respond to requests for comment.
The sale comes as SoftBank tries to boost confidence in its performance after posting a loss of $ 13 billion during its last fiscal year.
SoftBank’s investment portfolio has come under pressure after a series of setbacks in several high-profile bets, including real estate group WeWork and transportation company Uber.
It has also been hit by the recent collapse in Wirecard’s share price as a result of a controversial exchange by SoftBank Investment Advisers, which manages the Japanese group’s $ 100 billion Vision Fund.
The sale of shares comes just months after a federal judge gave the go-ahead to T-Mobile US and Sprint, which was controlled by SoftBank, after a protracted legal battle with a group of states led by Democratic officials.
SoftBank received a nearly 25 percent stake in the combined company, but has tried to narrow that position as it seeks to raise cash.
In May, SoftBank indicated that it could also sell up to $ 11.5 billion of its precious stake in Alibaba.
The Japanese group is expected to use the proceeds to reduce its debt burden and buy back shares as part of a truce with activist investor Elliott Management.
Marcelo Claure, SoftBank executive and director of T-Mobile, was planning to buy 5 million shares backed by a loan from the Japanese company as part of the transaction. Those shares would be valued at $ 515 million based on Tuesday’s sale price.
Ron Fisher, a longtime SoftBank executive, leaves the T-Mobile board after the deal.
The series of transactions includes an offering of common shares, mandatory convertible shares and a rights offering, along with additional shares that investment banks can sell if there is sufficient investor demand, known as “greenshoe.”
Tuesday’s offer by T-Mobile US to finance the purchase of the SoftBank stake was the largest offering of secondary shares of the year, according to data from Refinitiv. The deal pre-empted PNC Financial’s sale of $ 13 billion in BlackRock shares last month and was the largest since the U.S. Treasury sold $ 21 billion of shares in AIG, the insurer that rescued during the financial crisis.
A group of banks led by Goldman Sachs and Morgan Stanley signed the offer. PJT Partners advised the T-Mobile US independent board committee, and the Raine Group advised SoftBank.
