Thu, Jun 27, 2013 - Page 15 News List

Investors approve Softbank deal

AFP, TOKYO

People walk past a Softbank mobile phone shop in Tokyo yesterday.

Photo: AFP

Investors in Tokyo yesterday welcomed news that shareholders in US mobile carrier Sprint had approved a US$21.6 billion takeover by Softbank, paving the way for the biggest-ever overseas buyout by a Japanese firm.

The vote in the US on Tuesday clears one of the last major hurdles following a hard-fought acquisition battle that saw the Japanese firm hike its initial US$20 billion offer by US$1.6 billion.

The deal, which will see Softbank take a 78 percent stake in Sprint, was approved with 80 percent of the US firm’s outstanding voting shares, a statement said.

Softbank jumped as much as 4.2 percent to ¥5,660 in opening Tokyo trade before finishing the day at ¥5,420, down 0.18 percent on profit-taking while the broader Tokyo market turned down more than 1 percent.

The firm’s shares have almost doubled since deal was first reported in October last year.

Sprint shares initially jumped 1.9 percent to US$6.99 on the news before ending 0.29 percent higher in New York.

Completing the merger still requires approval from the US Federal Communications Commission but Sprint said in a statement the two firms expect it to be consummated in early next month.

“We are grateful that many Sprint shareholders supported our plan,” Softbank said after the vote. “From now on we plan to complete procedures of the deal swiftly on approval by the FCC.”

Sprint chief executive Dan Hesse said that “today is an historic day for our company.”

“The transaction with Softbank should enhance Sprint’s long-term value and competitive position by creating a company with greater financial flexibility,” he added.

Softbank had targeted Sprint — a distant third in US wireless services after AT&T Inc and Verizon Communications — as a way to gain entry into the lucrative US market.

The fresh capital is expected to help Sprint compete against its larger rivals.

However, the Japanese firm’s efforts ran into competition from Dish Network, which forced Softbank to increase its offer.

However, Dish last week abandoned its US$25.5 billion bid.

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