Softbank and Deutsche Telekom announced a revised agreement on the planned merger of their US mobile operators Sprint and T-Mobile. Softbank has agreed to accept a lower stake in the merged company than the original agreement signed in April 2018, in exchange for the potential to increase its stake over time.
Under the new agreement, Softbank will receive one T-Mobile share for every 11.13 shares of Sprint, up from 9.75 shares under the original agreement. The new ratio is a result of Softbank agreeing to give to T-Mobile 48.8 million of its shares in the company immediately after the merger is completed. This would leave Softbank with a 24 percent stake in the new company, down from 27 percent in the earlier deal, while Deutsche Telekom holds 43 percent rather than 42 percent.
The remainder of the shares will be the free float. These shareholders will still receive the earlier ratio of one T-Mobile share for every 9.75 Sprint shares.
In compensation for the lower price, Softbank secured a deal to receive the extra 48.8 million shares in return, if T-Mobile meets certain future share price milestones. These are a price of USD 150 from two years after closing the merger and USD 160 in the fifth year from closing.
The revised price follows a deterioration in Sprint's performance and share price since the original transaction was announced. The companies said they still hope to close the deal by the start of April but agreed a new deadline of 01 July at the latest. The takeover still requires approval from the California utilities regulator.
