Shareholders in Sprint Nextel have approved a US$21.6bn offer from Japanese telco Softbank to acquire a 78% stake in the wireless operator.
The proposal passed with 98% of shareholders voting in favour, which represented 80% of Sprint’s outstanding…
Shareholders in Sprint Nextel have approved a US$21.6bn offer from Japanese telco Softbank to acquire a 78% stake in the wireless operator.
The proposal passed with 98% of shareholders voting in favour, which represented 80% of Sprint’s outstanding common stock.
Sprint CEO Dan Hesse said: “Today is a historic day for our company, and I want to thank our shareholders for approving this transformative merger agreement.
“The transaction with Softbank should enhance Sprint’s long-term value and competitive position by creating a company with greater financial flexibility.”
The merger now has only one more hurdle to clear – regulatory approval from the FCC. Softbank hopes to close the deal early next month.
Sprint shareholders voted overwhelmingly in favour of the proposal after Softbank sweetened its bid earlier in June. Some Sprint investors had taken issue with the cash to equity ratio of Softbank’s offer price and had demanded more cash for their stock. Softbank duly obliged increasing the upfront portion from US$4.00 per share to US$5.50, but it also upped the amount of the post-takeover Sprint it would own from 70% to 78%.
The Japanese group, led by Masayoshi Son, faced pressure from US satellite broadcaster Dish Network, which had made a preliminary offer of US$25.5bn for Sprint. However, Sprint’s special committee said that after due diligence it did not think Dish’s interest would lead to a firm superior offer. Dish subsequently abandoned its pursuit of the third largest mobile player in the US. When Dish looked like a realistic acquirer, Son said that he would consider purchasing T-Mobile US as a plan B. Analysts have suggested that Dish may now turn its attentions to the German-owned operator.
The next step in Softbank’s plan is to secure the remainder of smaller US telco Clearwire Corporation via Sprint. Last week Sprint offered US$5.00 per share for the remaining 50% of the wireless internet provider that it does not already own. That offer trumped Dish’s US$4.40 tender offer for a minimum of 25% of Clearwire stock.
In its latest merger agreement Sprint disclosed that it had already received commitments from 45% of minority investors – it needs the approval of 50% to get the deal done.
The Clearwire takeover is contingent on the completion of Softbank’s purchase of Sprint.
