Sprint and T-Mobile to give Deutsche Telekom higher stake in combined company
SoftBank and Deutsche Telekom will hold 24 per cent and 43 per cent of shares respectively in the newly combined company
Sprint and T-Mobile have altered their merger deal agreement to give Deutsche Telekom a higher ownership stake in the new combined company.
Common shareholders won’t see any difference in the exchange ratio, which is 9.75 Sprint shares for 1 T-Mobile share. This is said to be because a change would require a new shareholder vote which would add more time to close the deal.
The two companies have already waited nearly two years for the transaction’s approval.
SoftBank, which owns the more than 80 per cent of Sprint, will see an exchange ratio of 11 Sprint shares for each T-Mobile share, the companies said.
SoftBank has agreed to surrender about 48.8 million T-Mobile shares it will gain in the merger after the transaction is complete. T-Mobile said it plans to close the merger by April 1.
SoftBank and Deutsche Telekom will hold 24 per cent and 43 per cent of shares respectively in the newly combined company.
Sprint shares were up more than 4 per cent following the announcement. T-Mobile shares were down 1.5 per cent.
SoftBank agreed to give Deutsche Telekom a slightly higher ownership stake . If the merged company’s stock hits $150 between 2022 and 2025 SoftBank can get its original percentage of shares back.
A US district judge ruled in favour of the $26bn merger between Sprint and T-Mobile last week.
The merger still cannot close until the California Public Utilities Commission approves the transaction.
FURTHER READING: T-Mobile and Sprint merger to go ahead in the US