Softbank officially closed on its acquisition of a 78% stake in Sprint Nextel, which cost the Japan-based operator $21.6 billion, or just slightly more than originally planned.
Operationally, the closing sees Sprint Nextel change its official name back to Sprint Corp., having changed from that title in 2005 after acquiring Nextel Communications. The carrier will continue trading on the New York Stock Exchange under the “S” symbol.
Dan Hesse will continue his role as CEO of Sprint as well as serving on the company’s board of directors. Softbank founder, chairman and CEO Masayoshi Son will now add chairman of Sprint to his business cards, white current director and president at Softbank, Ronald Fisher, has been appointed vice chairman of Sprint. Admiral Michael Mullen, who is a former chairman of the Joint Chiefs of Staff, has been named to the Sprint board of directors as security director, a move connected with Softbank gaining approval from the U.S. government after concerns were raised by the company’s use of network equipment provided by Chinese vendor Huawei.
Current Sprint board members Robert Bennett, Gordon Bethune and Frank Ianna will continue their roles with the new organization, with the makeup of the rest of the board having yet to be determined. Sprint did add that its headquarters will remain in Overland Park, Kan.
The deal, which was initially announced last October, had originally called for Softbank to pay $20.1 billion for a 70% stake in Sprint Nextel. However, Dish Network got into the bidding process earlier this year, putting in a bid of $25.5 billion for a 68% stake. Eventually, Softbank raised its offer with an infusion of more upfront cash for Sprint Nextel shareholders and garnered approval for the deal.
Sprint Nextel shareholders approved the Softbank deal late last month, with investors last week voting on what to do with their share options. Those results showed that just 3% of Sprint Nextel shareholders elected to trade in their stock for a piece of the new operations, with most electing to take their cash buyout and run. Further eroding potential confidence in the deal was the move by Standard & Poor’s Rating Services in cutting its long-term credit rating for Softbank to “BBB+” or what is termed a “junk” rating following the Sprint Nextel deal.
Sprint Nextel earlier this week closed on its acquisition of the remaining stake in Clearwire that it did not previously own. The move provided the carrier with complete access to Clearwire’s stash of 2.5 GHz spectrum that will be used to further bolster’s Sprint’s LTE build-out plans.
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