Exclusive: SoftBank eyes T-Mobile US as ‘Plan B'

Fri Jun 7, 2013 5:19pm EDT
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By Paritosh Bansal and Soyoung Kim

(Reuters) - SoftBank Corp 9984.T is in talks with Deutsche Telekom AG DTEGn.DE over a possible deal for T-Mobile US Inc TMUS.N, as the Japanese company looks for alternatives to enter the U.S. wireless market if its deal with Sprint Nextel Corp S.N falls apart, three sources familiar with the matter said on Friday.

SoftBank and Deutsche Telekom were in talks last year about a deal for T-Mobile USA and have had periodic discussions since then, but those conversations have intensified in recent weeks after Dish Network Corp DISH.O made a $25.5 billion counterbid for Sprint, two of the sources said. SoftBank has a deal to buy 70 percent of Sprint for $20.1 billion.

Deutsche Telekom owns 74 percent of T-Mobile US, and one possibility is for SoftBank to buy that stake instead, the sources said. T-Mobile US has a market value of about $15 billion.

SoftBank still wants to do the Sprint deal after spending months on it, and is looking at a possible T-Mobile transaction only as "Plan B", the sources said who declined to be named because the talks are private.

T-Mobile's shares rose more than 3 percent after the news of SoftBank's interest, while Sprint shares fell 1.2 percent.

The talks come ahead of a June 12 vote for Sprint shareholders to approve the Japanese company's bid for the No. 3 U.S. wireless carrier and could add pressure on investors as they decide how to vote. Earlier this week, proxy adviser Glass Lewis said Sprint shareholders should not vote on SoftBank's bid while the board reviewed Dish's offer.

"It seems to me that this is more SoftBank posturing to perhaps pressure Sprint's special committee to not delay the vote next week to continue its negotiations with Ergen," said BTIG analyst Walter Piecyk, referring to Dish Chairman Charlie Ergen.

Roy Behren, a merger arbitrage money manager at Westchester Capital Management, which claims ownership of more than 19 million Sprint shares, added, "I still don't think SoftBank gets the vote unless they bump the offer."   Continued...

A clerk works in front of a SoftBank Corp branch in Tokyo May 29, 2013. REUTERS/Toru Hanai