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It's real early in the morning for a press conference, but that's not the real story here. In Japan, Sprint and Softbank are holding a joint press conference confirming what we've previously heard. The Japanese carrier is to acquire a 70 percent stake in Sprint, worth a whopping $20.1 billion. 

The acquisition will be made up of $12.1 billion worth of existing shares to be purchased, and a further $8 billion in newly issued shares. The move also has LTE intentions in its core. The press conference continues, but you can find the full information in the press release after the break. 

SoftBank to Acquire 70% Stake in Sprint

Sprint Stockholders to Receive Total Consideration of $12.1 Billion in Cash and 30% Ownership in Newly Capitalized Sprint
Transaction Provides Sprint with $8.0 Billion of New Capital
Sprint to Leverage SoftBank’s Experience in Deployment of LTE as Sprint’s Nationwide Rollout of 4G LTE Continues
Significant Investment in the United States by One of the World’s Most Successful and Innovative Companies
Sprint will host an investor conference call to discuss the transaction at 8 a.m. ET today. Participants may dial 800-938-1120 in the U.S. or Canada (706-634-7849 internationally) and provide the following ID: 44906693 or may listen via the Internet at www.sprint.com/investors

TOKYO & OVERLAND PARK, Kan. (BUSINESS WIRE), October 15, 2012 - SOFTBANK CORP. (“SoftBank”) (TSE: 9984) and Sprint Nextel Corporation (“Sprint”) (NYSE: S) today announced that they have entered into a series of definitive agreements under which SoftBank will invest $20.1 billion in Sprint, consisting of $12.1 billion to be distributed to Sprint stockholders and $8.0 billion of new capital to strengthen Sprint’s balance sheet. Through this transaction, approximately 55% of current Sprint shares will be exchanged for $7.30 per share in cash, and the remaining shares will convert into shares of a new publicly traded entity, New Sprint. Following closing, SoftBank will own approximately 70% and Sprint equity holders will own approximately 30% of the shares of New Sprint on a fully-diluted basis.

SoftBank’s cash contribution, deep expertise in the deployment of next-generation wireless networks and track record of success in taking share in mature markets from larger telecommunications competitors are expected to create a stronger, more competitive New Sprint that will deliver significant benefits to U.S. consumers. The transaction has been approved by the Boards of Directors of both SoftBank and Sprint. Completion of the transaction is subject to Sprint stockholder approval, customary regulatory approvals and the satisfaction or waiver of other closing conditions. The companies expect the closing of the merger transaction to occur in mid-2013.

SoftBank Chairman and CEO, Masayoshi Son, said, “This transaction provides an excellent opportunity for SoftBank to leverage its expertise in smartphones and next-generation high speed networks, including LTE, to drive the mobile internet revolution in one of the world’s largest markets. As we have proven in Japan, we have achieved a v-shaped earnings recovery in the acquired mobile business and grown dramatically by introducing differentiated products to an incumbent-led market. Our track record of innovation, combined with Sprint’s strong brand and local leadership, provides a constructive beginning toward creating a more competitive American wireless market.”

The SoftBank transaction is expected to deliver the following benefits to Sprint and its stockholders:

Provides stockholders the ability to realize an attractive cash premium or to hold shares in a stronger, better capitalized Sprint
Provides Sprint with $8.0 billion of primary capital to enhance its mobile network and strengthen its balance sheet
Enables Sprint to benefit from SoftBank’s global leadership in LTE network development and deployment
Improves operating scale
Creates opportunities for collaborative innovation in consumer services and applications
Sprint CEO, Dan Hesse, said, “This is a transformative transaction for Sprint that creates immediate value for our stockholders, while providing an opportunity to participate in the future growth of a stronger, better capitalized Sprint going forward. Our management team is excited to work with SoftBank to learn from their successful deployment of LTE in Japan as we build out our advanced LTE network, improve the customer experience and continue the turnaround of our operations.”

Transaction Terms

SoftBank will form a new U.S. subsidiary, New Sprint, which will invest $3.1 billion in a newly?issued Sprint convertible senior bond following this announcement. The convertible bond will have a 7-year term and 1.0% coupon rate, and will be convertible, subject to regulatory approval, into Sprint common stock at $5.25 per share. Immediately prior to the merger, the bond will be converted into shares of Sprint, which will become a wholly-owned subsidiary of New Sprint.
Following Sprint stockholder and regulatory approval, and the satisfaction or waiver of the other closing conditions to the merger transaction, SoftBank will further capitalize New Sprint with an additional $17 billion and effect a merger transaction in which New Sprint will become a publicly-traded company and Sprint will survive as its wholly-owned subsidiary. Of the $17 billion, $4.9 billion will be used to purchase newly issued common shares of New Sprint at $5.25 per share. The remaining $12.1 billion will be distributed to Sprint stockholders in exchange for approximately 55% of currently outstanding shares. The other 45% of currently outstanding shares will convert into shares of New Sprint. SoftBank will also receive a warrant to purchase 55 million additional Sprint shares at an exercise price of $5.25 per share.
Pursuant to the merger, holders of outstanding shares of Sprint common stock will have the right to elect between receiving $7.30 per Sprint share or one share of New Sprint stock per Sprint share, subject to proration. Holders of Sprint equity awards will receive equity awards in New Sprint.
Post-transaction, SoftBank will own approximately 70% and Sprint equity holders will own approximately 30% of New Sprint shares on a fully-diluted basis.
SoftBank is financing the transaction through a combination of cash on hand and a syndicated financing facility.
The transaction does not require Sprint to take any actions involving Clearwire Corporation other than those set forth in agreements Sprint has previously entered into with Clearwire and certain of its shareholders.
After closing, Sprint’s headquarters will continue to be in Overland Park, Kansas. New Sprint will have a 10-member board of directors, including at least three members of Sprint’s board of directors. Mr. Hesse will continue as CEO of New Sprint and as a board member.

The Raine Group LLC and Mizuho Securities Co., Ltd. acted as lead financial advisors to SoftBank. Mizuho Corporate Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Deutsche Bank AG, Tokyo Branch acted as mandated lead arrangers to SoftBank. Deutsche Bank also provided financial advice to SoftBank in connection with this transaction. SoftBank’s legal advisors included 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 acted as co-lead financial advisors. Skadden, Arps, Slate, Meagher and Flom, LLP acted as lead counsel to Sprint. Lawler, Metzger, Keeney and Logan served as regulatory counsel, and Polsinelli Shughart PC served as Kansas counsel.

About SoftBank

SoftBank was established in 1983 by its current Chairman & CEO Masayoshi Son and has based its business growth on the Internet. It is currently engaged in various businesses in the information industry, including mobile communications, broadband services, fixed-line telecommunications, and portal services. In terms of consolidated results for fiscal 2011, net sales increased 6.6% year on year to ¥3.2 trillion, operating income increased 7.3% to ¥675.2 billion, and net income rose 65.4% to ¥313.7 billion.

About Sprint Nextel

Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel served more than 56 million customers at the end of the second quarter of 2012 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; offering industry-leading mobile data services, leading prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. The American Customer Satisfaction Index rated Sprint No. 1 among all national carriers in customer satisfaction and most improved, across all 47 industries, during the last four years. Newsweek ranked Sprint No. 3 in its 2011 Green Rankings, listing it as one of the nation’s greenest companies, the highest of any telecommunications company. You can learn more and visit Sprint at www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.

Cautionary Statement Regarding Forward Looking Statements

This document includes “forward-looking statements” within the meaning of the securities laws. The words “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan,” “providing guidance” and similar expressions are intended to identify information that is not historical in nature.

This document contains forward-looking statements relating to the proposed transaction between Sprint Nextel Corporation (“Sprint”) and SOFTBANK CORP. (“SoftBank”) and its group companies, including Starburst II, Inc. (“Starburst II”) pursuant to a merger agreement and bond purchase agreement. All statements, other than historical facts, including statements regarding the expected timing of the closing of the transaction; the ability of the parties to complete the transaction considering the various closing conditions; the expected benefits of the transaction such as improved operations, enhanced revenues and cash flow, growth potential, market profile and financial strength; the competitive ability and position of SoftBank or Sprint; and any assumptions underlying any of the foregoing, are forward-looking statements. Such statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. You should not place undue reliance on such statements. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, that (1) one or more closing conditions to the transaction may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction or that the required approval by Sprint’s stockholders may not be obtained; (2) there may be a material adverse change of SoftBank or Sprint or the respective businesses of SoftBank or Sprint may suffer as a result of uncertainty surrounding the transaction; (3) the transaction may involve unexpected costs, liabilities or delays; (4) legal proceedings may be initiated related to the transaction; and (5) other risk factors as detailed from time to time in Sprint’s and Starburst II’s reports filed with the Securities and Exchange Commission (“SEC”), including Sprint’s Annual Report on Form 10-K for the year ended December 31, 2011 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 and the proxy statement/prospectus to be contained in Starburst II’s Registration Statement on Form S-4, which are (or will be, when filed) available on the SEC’s web site (www.sec.gov). There can be no assurance that the merger will be completed, or if it is completed, that it will close within the anticipated time period or that the expected benefits of the merger will be realized.

None of Sprint, SoftBank or Starburst II undertakes any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

Additional Information and Where to Find It

In connection with the proposed strategic combination, Starburst II plans to file with the SEC a Registration Statement on Form S-4 that will include a proxy statement of Sprint, and that also will constitute a prospectus of Starburst II. Sprint will mail the proxy statement/prospectus to its stockholders. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. The proxy statement/prospectus, as well as other filings containing information about Sprint, SoftBank and Starburst II, will be available, free of charge, from the SEC’s web site (www.sec.gov). Sprint’s SEC filings in connection with the transaction also may be obtained, free of charge, from Sprint’s web site (www.sprint.com) under the tab “About Us – Investors” and then under the heading “Documents and Filings – SEC Filings,” or by directing a request to Sprint, 6200 Sprint Parkway, Overland Park, Kansas 66251, Attention: Shareholder Relations or (913) 794-1091. Starburst II’s SEC filings in connection with the transaction (when filed) also may be obtained, free of charge, by directing a request to SoftBank, 1-9-1 Higashi-Shimbashi, Minato-ku, Tokyo 105-7303, Japan; telephone: +81.3.6889.2290; e-mail: ir@softbank.co.jp.

Participants in the Merger Solicitation

The respective directors, executive officers and employees of Sprint, SoftBank, Starburst II and other persons may be deemed to be participants in the solicitation of proxies in respect of the transaction. Information regarding Sprint’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2011. Other information regarding the interests of such individuals as well as information regarding SoftBank’s and Starburst II’s directors and executive officers will be available in the proxy statement/prospectus when it becomes available. These documents can be obtained free of charge from the sources indicated above. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

 
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Softbank plans 70 percent acquisition of Sprint worth $20.1 billion

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I just want LTE rollout out the wazoo. I want 100 cities by the end of this year ( could only wish). I just want them to through like 2-4 billion dollars into rolling out a LTE system as fast and effectively as possible.

I think because of the time frame it won't happen so soon but by 2nd quarter next, they will blow it up and LTE will be all over the place. I also think they needed this to be able to complete there LTE promise. What i want for Sprint is to be a strong competitor, Speed up the network and keep it unlimited. If this will help them get Metro PCS then that's will be another good thing for them. That will also speed up there LTE roll-out. Set 2.5B aside for that spend the rest of the 5.5B on getting there LTE done.

They will be lucky to close this deal by the end of the year, and then the second quarter is only 3 months after that, so I'm not thinking this will speed up short term (1 year) LTE activations. It may only help Sprint's balance sheet until the (hopeful) cash infusion can filter through and alter future project schedules... which, ironically enough, could be through the end of 2013... which is the current schedule anyway. Interesting.

If Sprint don't do a massive LTE update in less than 6 month, the company would be called Kamekazee Softbank

So I was just about to leave Sprint for Verizon. Now I don't know if this means I should hurry up and leave or wait and see... Good grief

Get out and get out now... Legacy customers always get screwed when a telecom company gets bought. Ask almost anyone who was an old AT&T Wireless, Altel, or Dobson Cellular One customer.

If your going to get screwed why leave? Both att and verizon are screwing their customers now and new customers too. The way I see it is, this is most likely going to be a good thing in the short run, about 1 to 2 years. This means more money for lte rollout and more money for new towers and 3g improvement plus unlimited data for a least 1 more year. Since the other companies only get worse and more expensive anyway just stick with sprint and see what happens.

It's not final, The shareholders have to "approve" the merger... My opinion, I think that "SoftBank" has swallowed up another American company. Sprint/Nextel has been in business since 1938 and now a company that has been in business since 1983 buys up an American Icon. It's all up to the shareholders to think about.... "Morals over Money" or "Power over Money" The shareholders is in control.

I read somewhere that the way the deal was structured, they wouldn't have to wait for the acquisition to be approved by shareholders.

Yeah, that's what I was thinking too. It's unfortunate and may drive me to AT&T. But at least it's a Japanese corporation and not Chinese.

Why would this drive you to att? The worse that can happen is unlimited data going away. At this point sprint isn't going to raise prices and all they can do now is improve and with all the new cash at hand their network is only getting better plus they have one of the lowest rates on the market. All I know is that right now I have 5 mines and pay about $55 per line for all smartphones and unlimited data. Not giving that up yet even with the slow data. My calls are still good and so far that's all I really need in an emergency.

if it takes 20.1 billion and a 70% stake to make sprint a serious 3 option for LTE then as of right now i guess im ok with this deal right now but i want to know what are the long terms plans of softbank.

I was trying to decode the monthly service plans for "SoftBank" in Japan, it's kinda hefty (and confusing) on the consumer (my opinion) It's going to be a "wait and see" deal... and I'm wondering if we are still have to "honor" our 2yr. contract after the "merger" is complete in mid 2013? LOL!

I bet AT&T is nervous about this. T-mobile and Metro PCS and now Softbank/Sprint could threaten their business big time. Verizon probably doesn't have much to worry about.

That depends. If Sprint has LTE in all the same areas Verizon does, but has a lower price and unlimited data, Verizon could start losing customers big time...

Competition is always good for consumers.

Umm, T-Mobile was never an "American" carrier. They're known as Deutsche Telekom (German origin).

http://en.wikipedia.org/wiki/Deutsche_Telekom

As far as this merger goes...hopefully the billions placed into Sprint's bank account will help speed up the LTE roll out in 2013. Waiting for LTE is starting to become excruciatingly painful. I'm still waiting for them to light up LA and any of the surrounding suburbs of LA. Seeing the latest cities (if you can even call them that) in podunk areas get lit up is nothing but disappointment. I feel bad for those who are in Chicago and NYC as well. I want to believe in Sprint but I'm slowly losing faith.

You should check out s4gru.com. There is a thread full of LTE sightings in the LA area. Also, I'm not sure about NYC, but the Chicago area is coming along very well. We're over 50% done with the rollout, and there have been a lot of new LTE sightings all over the city in the last week or two. You can see all the LTE coverage in Chicagoland at sensorly.com. It has really filled in in the last couple weeks.

I'd also like to add that a bunch of 3rd and 4th round market rollouts are being accelerated, too.

Like I said, check out s4gru.com, and regain your faith.

"IF" sprint gets their act in gear and fixes their network ill go back for the price alone. love verizon but their too expensive. if not ill be moving to t-mobile this winter.

You're assuming sprint won't be changing their prices once the merger happens. Those with legacy rate plans are gonna be fine for at least a couple years (depending on weather the new company does grand fathering or not) but new customers will end up paying higher rates and have tiered data plans.

[English rant]
Grandparent doesn't understand "they're".
Parent doesn't understand "whether".
[/English rant]

You are comparing apple's to oranges. Softbank has the infrastructure to make it financially feasible to give unlimited. Sprint currently doesn't . The only reason sprint hasn't dumped unlimited yet is because they know if they did people would stop giving their craptastic network a pass and leave.

The biggest reason Softbank was interested in Sprint was because the company was run so similarly to Softbank. I can't foresee Softbank changing anything about the way Sprint does business.

No one knows if they will keep or cut unlimited data yet, but your comparison is way off given that the entire country of Japan is roughly the size of just the state of Montana.

It would be much cheaper to upgrade & provide coverage to an area that size then a country 20x larger.

Me and my team of 4 scientists are on a month long job now trying to decipher WTF you are trying to say here.....

I really just hope this means good things for sprint. They are terrific,or at least much better than Verizon,in both California where I am and in west Michigan where I live part time. Hoping everything just changes for the better and this doesn't result in a big business flop.

I am wondering since the terms of the majority ownership will be changing does that mean that the current contracts are voided only because our contract was with Sprint and not SoftBank. Does anyone know?

It means you're still under contract w/sprint until further notice. No one can say what changes will occur at this time.

I think Dan Hesse was having a hard time getting the Sprint Board of Directors to realize that in order to grow the company, you need to spend money. Every time he went to buy anything like the iPhone, or T-Mobile, or Metro PCS, or Clearwire, or LightSquared, they didn't let him breathe. They wanted him to build up the company but wouldn't let him spend the money required to do it. Now he has found an investor with enough money to buy him a 70% majority stake vote in his decision making. He essentially just replaced the vote of the board of directors for their lack of motivation to do anything. Maybe now he can get things done. Good for him. He was hired to do a job, and found the best way to do it was to work around your internal opposition. I hope he brings enough competition to the industry that even Verizon and AT&T subscribers see a drop in prices.

Unlike the disastrous takeovers at Verizon and At&t, the Softbank deal with Sprint is more of an investment. Softbank is mostly interested LTE development and running Softbank brands alongside Sprint brands.

I hope it means improved reception. I couldn't get a signal for over an hour yesterday in downtown San Antonio.

I think the worst thing they could do is do away with unlimited data. This is the only thing that separates them from the other carriers.