Japan’s Softbank (TYO:9984) spent a further US$72.7m on increasing its controlling stake in Sprint (NYSE:S) soon after the group said it had bought shares to underline its confidence in the US telco.
Japan’s Softbank (TYO:9984) spent a further US$72.7m on increasing its controlling stake in Sprint (NYSE:S) soon after the group said it had bought shares to underline its confidence in the US telco.
The Tokyo-based internet firm acquired about 16.8 million shares at US$3.90-US$4.74 each between 13-17 August, according to an SEC filing, marginally increasing its stake to just over 80%.
On 13 August, Softbank announced it had paid US$87m on buying 22.9 million of the shares, boosting its ownership by about 0.58% to 79.99%. That came a week after Softbank CEO Masayoshi joined Sprint’s results call to make it clear he wanted to turn around the telco rather than sell it.
Sprint’s shares have suffered over concerns about its ability to compete in a wireless market that is dominated by AT&T and Verizon Communications. Its results showed it had recently slipped behind rival T-Mobile US in subscriber numbers, putting it in fourth place, although the group also hailed its best churn rate ever at 1.56%.
Signs of a recovery, coupled with Softbank’s support, has helped boost Sprint’s shares by nearly 50% and add more than US$6bn to its market value recently. Its shares closed up 5.65% to US$4.86 on 18 August.
Softbank has said it will keep its stake below a 85% threshold that would force it to make a tender offer.
Arora buys into Softbank vision
Softbank president and COO Nikesh Arora has announced plans to buy about Y60bn (US$482.8m) worth of the Japanese group’s shares through a programme trade over the next six months.
The former Google executive joined Softbank last September and has been tipped as a likely successor to Son as CEO.
He has played an active role in the company’s overseas investment strategy, which has recently focused on internet-related companies outside the US in countries such as India, Indonesia, and South Korea.
Arora said the share transaction will be a large one for him to make in a personal capacity.
“However, I am extremely confident about the future of the SoftBank Group and the long-term objectives that we have set out,” he said.
“I intend to work closely with Mr. Son to make the vision a reality.”
Softbank has also been buying up its own shares, announcing earlier this month that it would spend up to Y120bn (US$964m) on them because it believes they are undervalued over concerns about Sprint.