Japan-based SoftBank Group said it would receive shares in telecoms giant T-Mobile US worth some $7.59 billion at no additional cost. T-Mobile US is majority-owned by Germany’s Deutsche Telekom.
SoftBank Group, led by Masayoshi Son, confirmed this decision late on Tuesday, revealing its directive to T-Mobile US to allocate 48.75 million shares in common stock. This action stems from an agreement established during the merger of SoftBank’s U.S.-based telecom, Sprint, and T-Mobile, following the fulfillment of specified conditions.
This transaction significantly bolsters SoftBank’s listed assets, effectively doubling its ownership stake in T-Mobile US from the current 3.75 percent to 7.64 percent. This development comes on the heels of the high-profile listing of chip designer Arm in September, further solidifying SoftBank’s position in the market, Reuters news report said.
Analyst Paul Golding from Macquarie emphasized the positive impact of this move, noting, “This increases the proportion of listed, measurable equity in hand on (SoftBank Group’s) balance sheet, and, even better, proportions of marginable equity relative to indebtedness.”
Moreover, the incorporation of the T-Mobile US shares substantially enhances SoftBank’s internal rate of return (IRR) on its initial investment in Sprint, boasting an impressive 25.5 percent IRR.
SoftBank’s strategic acquisition of these T-Mobile US shares underscores its continuous efforts to fortify its holdings and diversify its portfolio, solidifying its position as a key player in the telecommunications and technology sectors.