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T-Mobile Prices Shares at $103 Each in SoftBank Deal

Crystal Tse, Scott Moritz and Scott Deveau

(Bloomberg) -- SoftBank Group Corp. offloaded a large chunk of its stake in wireless carrier T-Mobile US Inc. stake at a discount, cementing a series of transactions that could fetch as much as $20 billion for the Japanese investment giant.

The Tokyo-based company raised $14.8 billion from a sale of T-Mobile shares to institutional investors, SoftBank said in a statement. The offering of 143.4 million shares was priced at $103 apiece, representing a 3.9% discount to T-Mobile’s record high closing price on Tuesday.

SoftBank is set to raise another $4.1 billion through several related deals that will see shares sold to Marcelo Claure, a T-Mobile board member, and other investors, according to the statement Wednesday. The total proceeds would rise to $20 billion if so-called over-allotment options are exercised.

The deals are part of SoftBank’s broader $42 billion push to unload assets to finance stock buybacks and pay down debt. Masayoshi Son, the company’s founder, is dealing with steep losses in his Vision Fund after writing down the value of investments in the sharing economy from WeWork to Uber Technologies Inc.

T-Mobile’s controlling shareholder, Germany’s Deutsche Telekom AG, has also been granted the right to buy 101.5 million shares in the U.S. carrier currently held by SoftBank, according to the statement. The stake is worth about $10.9 billion based on Wednesday’s closing price. Deutsche Telekom can exercise its options to buy the stock up to June 2024, according to a T-Mobile filing.

SoftBank will now turn its attention to other assets in its portfolio and may pursue an outright sale of part of its stake in e-commerce giant Alibaba Group Holding Ltd. Son has said $11.5 billion raised from issuing contracts to sell stock in the Chinese company was a first step toward unwinding more of its holdings. SoftBank also plans to sell a 5% stake in its Japanese wireless subsidiary.

Read more: SoftBank to Sell Slice of T-Mobile in a $21 Billion Deal

SoftBank agreed to pay T-Mobile $300 million as part of the transaction and will cover all fees and expenses related to the deal. The company became a co-owner of T-Mobile with Deutsche Telekom after the carrier took over Sprint Corp. this year in a $26.5 billion merger.

SoftBank “needs to further enhance its cash reserves,” the Japanese company said in a statement on Tuesday, citing concerns for “a second and third wave of spread of Covid-19.” The Japanese investment giant may invest the proceeds in high-quality securities until they are used for buybacks or debt reductions.

The stock offering was overseen by Goldman Sachs Group Inc., Morgan Stanley, Citigroup Inc., JPMorgan Chase & Co., Barclays Plc, Bank of America Corp., Deutsche Bank AG and Mizuho Financial Group Inc. PJT Partners Inc. served as financial adviser to T-Mobile’s board.

(Updates with details of related transactions from third paragraph)

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