On Wednesday, Sprint and SoftBank announced the completion of the Japanese telecom company's purchase of 78% of Sprint for $21.6 billion. Sprint stockholders will receive $16.6 billion while $5 billion will be injected into Sprint. 72% of Sprint's common stock will be acquired by SoftBank for $7.65 in cash while the remaining shares are being converted into common stock of a new company called Sprint Corporation. Current Sprint holders were given the option for receiving a prorated amount of cash or one share in the new company for each Sprint share owned.
Those who chose cash will receive $5.647658 in cash and 0.261744048 share of Sprint for each old Sprint share owned. Current Sprint stockholders will now own 22% of a more financial secure Sprint, with SoftBank owning the remaining 78%. The new Sprint Corporation will keep the "S" ticker symbol on the NYSE and starting today, the shares will trade on a "when-issued" basis on the NYSE. "When-issued" trading is traditionally offered by the NYSE after a merger closes, to allow stockholders of the acquired company to sell the shares they will be receiving based on the terms of the deal, before those shares are issued.
It's no surprise that SoftBank founder, Chairman and CEO Masayoshi Son, will become Chairman of the Board of the new Sprint while Sprint CEO Dan Hesse will hold the same position in the new company.
OVERLAND PARK, Kan. & TOKYO (BUSINESS WIRE), July 10, 2013 - Sprint Nextel Corporation (NYSE: S) ("Sprint") and SoftBank Corp. (TSE: 9984) ("SoftBank") today announced the completion of their merger whereby SoftBank has invested approximately $21.6 billion in Sprint, consisting of approximately $16.6 billion to be distributed to Sprint stockholders and an aggregate $5 billion of new capital ($1.9 billion at closing) to strengthen Sprint's balance sheet. Sprint stockholders voted to approve the transaction at a special meeting of stockholders held on June 25, 2013.
Through this transaction, approximately 72 percent of current Sprint shares are being acquired by SoftBank for $7.65 per share in cash, and the remaining shares are being converted into shares of a new publicly traded entity named Sprint Corporation. Each Sprint stockholder had the option to elect to receive one share of common stock in the new company or to elect to receive cash, subject to proration, for each share of Sprint common stock owned by that stockholder. A stockholder who made no election was deemed to have elected cash.
Based on the elections made by Sprint stockholders, each stockholder that elected to receive stock will receive one share of stock in Sprint Corporation, and each stockholder that elected (or was deemed to have elected) to receive cash will receive a combination of $5.647658 in cash and 0.261744048 of a share of stock in Sprint Corporation. As a result of the transaction, the ownership of current Sprint equity holders in a stronger, more competitive Sprint will be approximately 22 percent, while SoftBank will own approximately 78 percent, both calculated on a fully diluted basis.
Sprint Corporation will be listed and traded on the New York Stock Exchange ("NYSE") under the ticker symbol, "S." Sprint Corporation has been advised by the NYSE that it is expected that Sprint Corporation will continue to trade on the NYSE's "when-issued" market on July 11, 2013 and regular trading under the ticker symbol "S" will commence on Friday, July 12, 2013. Sprint Corporation stockholders should contact their brokers for instructions on trading in the NYSE's "when-issued" market.
Dan Hesse has been appointed Chief Executive Officer of Sprint Corporation and will serve on the board of directors. Masayoshi Son, founder, Chairman and CEO of SoftBank will serve as Chairman of the Sprint Corporation board of directors and Ronald Fisher, director of SoftBank and president of SoftBank Holdings Inc., has been appointed Vice Chairman. Admiral Michael G. Mullen, Former Chairman, Joint Chiefs of Staff, has been named to the Sprint Corporation board of directors as Security Director. Robert Bennett, Gordon Bethune and Frank Ianna, who are currently members of the Sprint board, will also serve on the Sprint Corporation board of directors. SoftBank and Sprint have not yet determined the remaining members of the Sprint Corporation board of directors. The company's headquarters will remain in Overland Park, Kansas.
The Raine Group LLC is serving as lead financial advisor to SoftBank. Mizuho Securities, Goldman Sachs, Deutsche Bank, JP Morgan and Credit Suisse also served as advisors. SoftBank's legal advisors include Morrison & Foerster LLP as lead counsel, Mori Hamada & Matsumoto as Japanese counsel, Dow Lohnes PLLC as regulatory counsel, Potter Anderson & Corroon LLP as Delaware counsel, and Foulston & Siefkin LLP as Kansas counsel.
Citigroup Global Markets Inc., Rothschild Inc. and UBS Investment Bank are co-lead financial advisors for Sprint. Sprint's legal advisors include Skadden, Arps, Slate, Meagher & Flom LLP as lead counsel, Lawler, Metzger, Keeney and Logan as regulatory counsel, and Polsinelli PC as Kansas counsel. The Special Committee of the Sprint Board of Directors is being advised by Bank of America Merrill Lynch, Shearman & Sterling LLP, Bingham McCutchen LLP and Spectrum Management Consulting.