Japan’s Softbank says its board has approved the signing of a bridge loan contract for up to JPY1.65 trillion ($19.7 billion), which the company plans to use to fund its purchase of a controlling stake in US operator Sprint.
Softbank (Tokyo, Japan), Japan’s third-largest mobile-phone operator, announced plans to buy 70% of Sprint back in October for a fee of approximately $20 billion.
The deal would mark the largest foreign acquisition by a Japanese company of all time.
Softbank says the loan is scheduled to be refinanced through a mixture of mid- and long-term financing.
The operator also expects to record approximately JPY17 billion in costs associated with the loan arrangement as non-operating expenses for the financial year ending in March 2013.
Softbank’s entry into the US is a contributory factor in the current shakeup of the country’s telecoms market, which has seen fourth-place T-Mobile (Bellevue, USA) announce a merger with smaller rival MetroPCS (Richardson, USA).
While that deal awaits regulatory approval, number-three Sprint (Overland Park, USA) has recently been linked with a complete takeover of Clearwire (Bellevue, USA), the mobile broadband company in which it already holds a controlling stake.
Last week, Softbank was reported to have told Sprint that it would not consent to any bid higher than $2.97 per share.
Sprint had allegedly offered $2.90 per share for the 49% of the company it does not already own, but this week reportedly sweetened its offer to $2.97 per share.
Softbank’s resources could clearly reinvigorate both Sprint and Clearwire, which remains desperately in need of additional financing to fulfil its network-rollout ambitions.
Sprint itself has long struggled against bigger rivals AT&T (Dallas, USA) and Verizon Wireless (New York, USA), with some analysts suggesting the US increasingly resembles a duopoly.
Regulatory authorities previously blocked a merger between AT&T and T-Mobile out of concern it would make one of the country’s two leading players even stronger, and may be more amenable to tie-ups involving other parties.