It appears that SoftBank Group Corp is negotiating the sale of a significant portion of its US shares from T-Mobile to Deutsche Telekom AG. The Japanese conglomerate is looking for ways to raise funds after reporting a $ 18 billion loss to its huge Vision Fund, which is starting to show negative results after fifteen years.
The deal would increase Deutsche Telekom's stake in T-Mobile by over 50% https: //t.co/nsIF6vmzft
– The Wall Street Journal (@WSJ) May 18, 2020
It appears that Softbank's recent financial report has also been hit by the COVID-19 pandemic and some dire decisions that involve investing nearly $ 10 billion in WeWork, an office-sharing company. Now Softbank plans to raise $ 41 billion by selling assets to increase liquidity and fund a major new share buyback program. To achieve this goal, however, the Japanese conglomerate would have to sell a significant part of its T-Mobile stake to Deutsche Telekom. When operations are completed, Deutsche Telekom's stake in T-Mobile will remain from almost 44 percent to over 50 percent.
T-Mobile's market value following the recent Sprint merger is approximately $ 120 billion, which would not be affected by the potential operation. Softbank is also expected to retain the rights to 48.8 million shares to complete the merger. These will be reissued if T-Mobile's share price reaches certain milestones within two years. Unfortunately, neither SoftBank nor Deutsche Telekom were immediately available for comment.
Source The Wall Street Journal