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Softbank (SFTBF.PK) is in negotiations with three major Japanese banks - Mizuho (MFG), Sumitomo...

Softbank (SFTBF.PK) is in negotiations with three major Japanese banks - Mizuho (MFG), Sumitomo Mitsui (SMFG) and Mitsubishi UFJ (MTU) - about borrowing $23B to fund its bid for Sprint (S), Reuters reports. While Sprint is worth $17.3B, it also carries almost $15B of debt. Japanese investors have reacted with dismay to news of the talks, with Softbank's shares closing -17%.
Comments (9)
  • Dana Blankenhorn
    , contributor
    Comments (5692) | Send Message
     
    With Softbank plunging S shareholders are wise to get out. If this deal unravels I don't see a bottom for S.
    12 Oct 2012, 11:20 AM Reply Like
  • larry1135
    , contributor
    Comments (54) | Send Message
     
    And if does not unravel how wise is that to have sold.
    12 Oct 2012, 11:54 PM Reply Like
  • scottiitpro
    , contributor
    Comment (1) | Send Message
     
    However, from what I can tell, it's wiser to get out of Sprint. This deal still has to go through antitrust laws as well as the scrutiny of the banks. The trend in telecom has been to shoot down major mergers and acquisitions.
    Although, SoftBank has the record of turning Verizon around in 2006, 2006 was a much better year and Verizon was in much better shape than Sprint is now.
    There's a better chance of a S acquisition not going through IMHO.
    On the flip-side, what's more likely to occur, is a buyout of CLWR. With CLWR debt also being heavy, but the value of CLWR's massive amount of Spectrum outweighing it's debt value. It's Spectrum is also the same technology common to Japan and will allow Japan to increase it's market share in the U.S. An acquisition such as this would stand probably past antitrust laws.
    Interestingly, via Sprint's 48% ownership in CLWR, Sprint will benefit tremendously and this deal will allow Sprint to compete with Verizon via CLWR.

     

    CLWR is the key here, and will ultimately be the deciding factor of the outcome of this play by SoftBank.
    14 Oct 2012, 06:24 PM Reply Like
  • larry1135
    , contributor
    Comments (54) | Send Message
     
    I'm long Sprint and it is NOT wise to get out and lose the upside that is coming due to all the right moves. All the wrong moves that were made before are now rather OLD news.
    15 Oct 2012, 08:58 AM Reply Like
  • Dana Blankenhorn
    , contributor
    Comments (5692) | Send Message
     
    Even if you like Sprint in the longer term, why not take some profits now and get in at a more attractive price as this deal goes through the inevitable slowdown of government regulation, as Scottitpro suggests? You think it's going to stay here while that happens?
    15 Oct 2012, 09:25 AM Reply Like
  • larry1135
    , contributor
    Comments (54) | Send Message
     
    This from another article on Seeking Alpha.

     

    SoftBank/Sprint: 55% of existing Sprint (S +0.5%) shares will be purchased for $7.30/share for $12.1B

     

    What price should we sell at under $6 or when it breaks $6? You are say it is wise to get out now correct? I think that would leave some money on the table.

     

    So, what price would you sell at big D?
    15 Oct 2012, 10:12 AM Reply Like
  • Dana Blankenhorn
    , contributor
    Comments (5692) | Send Message
     
    I would sell now, at today's price,although your feelings may be different based on your basis in the shares.

     

    If you bought near $2, run like you stole something. If you bought at $10, you might be tempted to hold out.
    15 Oct 2012, 10:39 AM Reply Like
  • larry1135
    , contributor
    Comments (54) | Send Message
     
    I think if you bought at $2 like I did and sold today you would be leaving money on the table.

     

    Dana B. what position in Sprint do you have? Have you been long are you shorting currently?
    15 Oct 2012, 11:00 AM Reply Like
  • Dana Blankenhorn
    , contributor
    Comments (5692) | Send Message
     
    I have no position in S, as my disclosures on S stories note. Neither long nor short. Covering it as a reporter, someone who has covered telecom for 30 years.
    15 Oct 2012, 11:10 AM Reply Like
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