SoftBank Group
shares are on the rise Wednesday after the company said it would receive $7.6 billion of
T-Mobile
shares in a contingent payout tied to the company’s sale of the wireless carrier Sprint in 2020.
SoftBank acquired Sprint in 2013 and sold the company to T-Mobile in 2020 in a $26 billion all-stock deal.
Under the terms of that transaction, T-Mobile agreed to issue 48,751,557 shares to SoftBank if the 45-day trailing volume-weighted average price of T-Mobile shares at any time after the second anniversary of the close of the merger through the end of 2025 exceeded $150, adjusted for dividends. T-Mobile recently paid a 65-cent dividend, reducing the threshold price to $149.35.
T-Mobile shares closed Tuesday at $156.83.
In a regulatory filing, T-Mobile confirmed that the 45-day volume- weighted price topped the threshold price on Dec. 22. T-Mobile said it would “promptly” issue the additional shares to SoftBank.
SoftBank said that as of Sept. 30, the company had included on its balance sheet $5.666 billion for the contingent value of the additional T-Mobile shares. It will book a gain of $1.925 billion now that the payout has been triggered.
SoftBank now holds a 7.6% stake in T-Mobile, another filing shows, a position worth about $14.4 billion.
The Japanese holding company gave no immediately indication of what it plans to do with the stake. SoftBank also holds a 90% stake in newly public chip design house
Arm Holdings,
a position worth more than $68 billion, among other assets. The company also runs the Vision Fund and Vision Fund 2 venture capital portfolios.
SoftBank’s American depositary receipts were 2.5% higher in U.S. trading, to $22.32. The company, which tends to trade at a sharp discount to its underlying net asset value, has a market cap of $65.4 billion, below the value of its Arm stake. In Tokyo trading, SoftBank shares rallied 4.2% on Wednesday.
Write to Eric J. Savitz at [email protected]
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