After mounting market speculation, Sprint has confirmed that it is in discussions with Japanese telco Softbank “regarding a potential substantial investment by Softbank in Sprint” which “could involve a change of control of Sprint”. Media…
After mounting market speculation, Sprint has confirmed that it is in discussions with Japanese telco Softbank “regarding a potential substantial investment by Softbank in Sprint” which “could involve a change of control of Sprint”.
Media reports have suggested that Softbank is looking to buy two thirds of the US telco, although neither company has confirmed further details of the transaction.
Credit Suisse analyst Hitoshi Hayakawa estimated the maximum value of the deal would be Y1.6trn (US$20bn) during a conference call prior to confirmation of the talks.
Also during the call, Jonathan Chaplin, US telecom services analyst, said that Sprint was an undervalued stock and that the deal would provide a “long term opportunity for meaningful consolidation in the US”.
Both companies have been linked with other M&A activity this month. Softbank recently agreed to purchase rival Japanese telco eAccess for US$2.3bn, a transaction which represents significant consolidation for the Japanese market.
Before news of the Softbank talks emerged, Sprint was rumoured to be considering a rival bid for MetroPCS, which has agreed to merge with T-Mobile USA. Sprint’s board came close to buying MetroPCS in February for a reported US$8bn but backed out reportedly hours before the companies were due to announce the agreement due to cash commitments to its Network Vision upgrade project.
Sprint is the third-largest operator in the US market, valued at US$15.12bn as of 10 October.
