SoftBank is said to be preparing a deal to sell a big portion of its stake in the new T-Mobile US – post the Sprint merger.
According to those familiar with the situation, SoftBank is looking to sell $20 billion of its $31 billion stake in the company. This would give Deutsche Telekom an even larger stake in the company. While allowing SoftBank to raise capital.
SoftBank currently owns about 25% of T-Mobile US
After the merger with Sprint completed, SoftBank gained a 25% stake in the new company, T-Mobile US. But it is now looking to sell about two-thirds of that share to Deutsche Telekom. Giving it an even larger stake in the company. And it would allow the German company to consolidate the unit's financial results.
SoftBank would then look to sell shares in a secondary offering, and retain a smaller stake itself. And this deal could be announced as soon as this week.
The company only got this share of T-Mobile this year – really, just last month. After the US approved of the sale of Sprint to T-Mobile. SoftBank's founder, Masayoshi Son is currently looking to sell about $45 billion in assets himself, to raise cash so he can buy back shares and pay down SoftBank's debt.
According to Atul Goyal, a senior analyst at Jeffries Group, "if SoftBank Group can renegotiate that sale, it will reduce pressure on SoftBank Group to sell its stakes in Alibaba or SoftBank Corp."
This comes after SoftBank lost a ton by buying Sprint
A few years ago, Masayoshi Son bought a controlling stake in Sprint (over 70% ownership). With the plan being to then purchase T-Mobile US and combined the two. But the Obama Administration was not going to let that happen. And during those few years, Son and SoftBank lost a fortune on Sprint. Losing nearly half of what the company spent on Sprint.
So this deal to get T-Mobile to purchase Sprint was huge for Son and SoftBank, and very much needed.
However, now that SoftBank is looking to sell a substantial piece of its stake in T-Mobile US, it looks like SoftBank doesn't really want a piece of the US any longer. SoftBank owns a ton of companies, though most of them are not controlling stakes. Like Uber, ARM, Alibaba to name a few. But none of the shed money as quickly as Sprint did. Which is why Sprint had to merge with T-Mobile, or it would likely go out of business fairly quickly.