What would happen if Softbank paid off the Debt of Sprint. I think that is what he will do but unfortunately that will not happen until it is Private...He will use some of the Alibaba gains to reduce the debt and then collect interest and dividends on the Privately held Sprint...The longs will be screwed again. My only question is once he hits 85% can any ohter investor bid on the remaining 15%?
So, could a partner come in, pay down debt and get some sort of equity position without diluting current shareholders? I just cant figure out a way this would happen. I suppose the sale of some spectrum could also do the same thing.
I think you are correct about the layering. And I think there may be some deal in the works that will allow Sprint to get whatever 600 spectrum it needs in the future. A swap of 2.5 for some 600. Or better yet, let T mobile get all of the 30 mghz set aside for smaller carriers with no competition and then merge the two later.
There is more strategy involved here than maybe anyone on this board can imagine...
This is from the merger agreement...
Mandatory Offer to Purchase. At the effective time of the SoftBank Merger, the New Sprint certificate of incorporation will provide that, in the event that the combined voting interest of SoftBank and its controlled affiliates in New Sprint exceeds 85% of the outstanding voting securities of New Sprint, then SoftBank or a controlled affiliate will make an offer to acquire all the remaining shares of New Sprint common stock at a price not less than the volume-weighted average closing price of New Sprint common stock for the 20 consecutive trading days immediately preceding such offer.