SOFTBANK DEAL | $3.1 billion action is step toward acquisition

SoftBank delivers $3.1 billion to Sprint ahead of acquisition

Updated: 2012-10-23T02:57:11Z

By MARK DAVIS

The Kansas City Star

SoftBank Corp. has delivered $3.1 billion to Sprint Nextel Corp. in the first step of its plan to acquire 70 percent of the Overland Park-based wireless telephone company.

Sprint essentially raised the money by selling bonds to a SoftBank subsidiary called Starburst II Inc., according to an announcement Monday. SoftBank will be able to convert the bonds into shares of Sprint as part of the planned acquisition, which is expected to happen mid-next year.

The conversion would give SoftBank 590,476,190 shares of Sprint common stock, or nearly 19.7 percent of the company.

SoftBank’s agreement includes an additional investment of $4.9 billion into Sprint when they complete their deal.

The total, $8 billion, will help Sprint finance its expensive network upgrade and may allow it to bid to acquire other wireless carriers or more wireless spectrum, which are the licensed airwaves the companies use to provide service.

Under the deal, Sprint shareholders will receive $12.1 billion from SoftBank in exchange for 55 percent of their shares. They’ll receive shares in a new Sprint for the other 45 percent of Sprint they own.

The plan by SoftBank, Japan’s third-largest cellphone company, to acquire control of Sprint requires approval from Sprint shareholders and regulators. A proxy statement that describes the deal will be mailed to shareholders ahead of the vote.

Sprint shares rose 3 cents Monday and closed at $5.68 a share before the announcement about the bond sale.

To reach Mark Davis, call 816-234-4372 or send email to mdavis@kcstar.com

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