Latest from Next TV in Softbank

Softbank Could Sell Up to $20B in T-Mobile Shares

Mike Farrell — Tue, 16 Jun 2020 17:27:06 +0000

Softbank Group said it is exploring options to monetize its stake in U.S. wireless carrier T-Mobile, a move that could raise as much as $20 billion and is part of a larger plan to sell off assets.

Softbank said Tuesday that it is exploring its options with the T-Mobile stake, which it acquired after it merged its U.S.-based wireless company Sprint with T-Mobile in April. According to reports, Softbank could sell as much as $20 billion of its T-Mobile stock, or about 200 million shares, as part of a larger effort to monetize about $40 billion in assets.

Softbank acquired its Sprint stake in 2013, but the wireless company never lived up to its expectations and sold the wireless carrier to T-Mobile in April in a deal valued at $26 billion.

Softbank has struggled of late, mainly because of bad investments made by its Vision Fund, the $100 billion venture capital arm formed by Softbank founder, chairman and CEO Masayoshi Son in 2017 to invest in leading edge technologies. Big bets on tech companies like Uber and WeWorks fizzled -- it reduced the value of its WeWork stake from $47 billion to just $2.9 billion and its Uber interest lost about $10 billion in value -- leading to an $18 billion loss for the VC arm last year.

In a Securities and Exchange Commission filing, T-Mobile said Softbank is considering several options to monetize its investment, including a private placement offering, private negotiations with T-Mobile, Deutsche Telekom or third parties, derivative or hedging transactions, margin loans or other structured transactions.

Deutsche Telekom has been speculated as a possible buyer of Softbank’s T-Mobile shares, and though it would need to sign off on some transactions, has not commented on its intentions.

T-Mobile stock, down as much as 4% in early trading Tuesday, was priced at $103.03 each (down 1.6%) by the early afternoon.

Charter Stock Soars on Renewed Softbank Speculation

Mike Farrell — Mon, 06 Nov 2017 16:08:00 +0000

Charter Communications stock was up more than 7% in early trading Monday as speculation concerning a possible deal with Japanese wireless giant Softbank, rejected just months ago, has been rekindled.

Charter stock was trading as high as $361.28 per share (up 7.7% or $25.85 each) after CNBC reported that Softbank chairman Masayoshi Son was willing to come back to the table with the cable company. Softbank had made overtures to Charter in July, which were rebuffed by the cable operator and its largest individual shareholder Liberty Media. Softbank later turned its attention to moving forward with the T-Mobile merger. Now that those talks are off too, CNBC said Son is willing to restart his Charter efforts.

According to CNBC, Liberty, which owns about 27% of Charter, is interested in a combination, while Charter management is not.

Charter declined to comment.

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak was skeptical about Liberty’s interest in a deal, particularly because Sprint’s equity is so volatile. And he wondered why either would want to rush into a deal.

“I don’t see why Liberty would be interested in taking Sprint/Softbank equity,” Wlodarczak said in an e-mail message. “The US wireless business is going to get uglier and uglier, precipitated partly by the aggressive entrance of cable into wireless utilizing favorable MVNO’s. A better move – and far more likely – is cable in a couple of years after a competitive implosion in wireless, buying a U.S. wireless operator at a healthy discount to current multiples.”

Sprint, T-Mobile Scrap Merger Talks

Mike Farrell — Sat, 04 Nov 2017 21:54:00 +0000

Just a day after they offered a ray of hope that their protracted merger talks would end in a deal, Sprint and T-Mobile officially called it off on Saturday after a meeting between the chiefs of both companies failed to conjure up an agreement.

Sprint and T-Mobile have been doing the merger dance for years, scrapping talks in 2014 after it became apparent they wouldn’t get federal approval for a deal and restarting them this year in the wake of a business-friendly Presidential administration. The two had been in talks for months and seemed to reach an impasse earlier last week after T-Mobile parent Deutsche Telekom made an offer that would give them strict control of the combination. When Sprint parent Softbank balked at that offer, it seemed that the deal was off the table, but on Friday, T-Mobile offered a ray of hope, making a new proposal and scheduling a meeting between the chiefs of both companies for the weekend.

That apparently wasn’t enough. In a brief statement Saturday, Sprint said it has ceased merger discussions with T-Mobile.

“While we couldn’t reach an agreement to combine our companies, we certainly recognize the benefits of scale through a potential combination,” Sprint CEO Marcelo Claure said in a statement. “However, we have agreed that it is best to move forward on our own. We know we have significant assets, including our rich spectrum holdings, and are accelerating significant investments in our network to ensure our continued growth. As convergence in the connectivity marketplace continues, we believe significant opportunities exist to establish strong partnerships across multiple industries. We are determined to continue our efforts to change the wireless industry and compete fiercely. We look forward to continuing to take the fight to the duopoly and newly emerging competitors."

According to the Wall Street Journal, Sprint parent Softbank will instead increase its stake in the wireless company from 80% to about 85%, buying shares on the open market.

The cancellation of the T-Mobile deal could open the door for other potential suitors. Dish Network attempted a deal back in 2013, but was bested by an offer from Softbank. Dish CEO Charlie Ergen said back in August that he expected more M&A to occur in the space, but would not comment on Sprint. And Softbank, which was rumored to be eyeing a pairing with Charter Communications, could restart those engines, although Charter has specifically said it was not interested in the past.

Sen. Amy Klobuchar (D-Minn.), who joined other congressional Democrats to push government regulators to look hard at any potential merger, was pleased.

"This is good news for consumers—a potential merger by T-Mobile and Sprint could have raised serious antitrust issues," she said. "This is exactly why I urged the FCC and DOJ to investigate this potential merger, because maintaining competition among the four largest cell phone carriers leads to lower prices, better service and more innovation."

Reports: Sprint, T-Mobile Break Off Merger Talks

Mike Farrell — Mon, 30 Oct 2017 18:34:00 +0000

Sprint and T-Mobile have reportedly broken off merger talks, unable to agree upon terms of ownership for the combined wireless giants, according to reports.

Sprint and T-Mobile have been in talks for months concerning a merger that would combine the third and fourth largest wireless companies in the country. According to reports by the Wall Street Journal and the Nikkei Asian Review, Sprint parent Softbank and T-Mobile parent Deutsche Telekom were moving toward a transaction but couldn't agree on ownership terms.

According to the Journal, the two were discussing an all-stock deal that would give Deutsche Telekom control, but over the weekend Softbank’s board of directors balked.

Sprint and T-Mobile could not be reached immediately for comment.

T-Mobile shares dipped nearly 5% ($3.02) in afternoon trading to $59.92 each while Sprint shares fell more than 9% (64 cents) to $6.35 per share.

Dish Network -- a former Sprint suitor that some believe could make another run for the company – was the big gainer, rising 4% ($1.83 each) to $48.32 per share.

Sprint CEO Claure Bags $21.8M in 2104 Comp

Mike Farrell — Fri, 26 Jun 2015 21:30:00 +0000

Marcelo Claure, the Bolivian-born billionaire who was tapped to head up struggling wireless giant Sprint in August, received $21.8 million in total compensation in fiscal 2014, making him one of the highest paid executives in the telecom business.

Sprint’s fiscal year ends on March 31.

Claure, the founder of mobile phone distributor Brightstar, was tapped by Sprint’s largest shareholder, Softbank chairman Masayoshi Son, to replace Dan Hesse, who had been CEO for about seven years. Hesse received $10.5 million in total compensation in fiscal 2014, most of that from his severance package.

Claure received a base salary of $923,077 as well as generous stock awards ($10.6 million) and option awards ($7.7 million), according to a proxy statement filed with the Securities and Exchange Commission Friday. Claure has overseen an aggressive price war aimed at winning back customers to the wireless carrier but which has battered its bottom line.

In the telecom space, Claure was topped only by AT&T CEO Randall Stephenson, who received total 2014 compensation of about $24 million, according to reports.

SoftBank To Buy DramaFever

Jeff Baumgartner — Tue, 14 Oct 2014 19:45:00 +0000

SoftBank Internet and Media Inc. (SIMI), a company with ties to U.S. mobile carrier Sprint, has agreed to buy DramaFever, an online video service that features “premium international shows and movies” from more than 70 broadcasters and studios in Asia, Europe and the Americas.

Financial terms weren’t disclosed, but Re/code reported last week that DramaFever has been in talks with multiple interested parties, including Barry Diller’s IAC and AMC Networks, but noted that there were concerns that some of DramaFever’s revenues were dependent on a sub-licensing agreement with Hulu.

Founded in 2009, DramaFever offers a mix of ad-supported fare as well as a subscription offering that runs $9.99 per month. Supporting access on Web browsers, iOS and Android devices, and the Roku and Goolgle TV platforms (Google's nearing the debut of a new platform, Android TV), DramaFever touts a library of about 700 titles and 15,000 episodes and claims to have a base of 20 million unique monthly viewers.

DramaFever has raised $12 million and counts investors such as AMC Networks, Bertelsmann, MK Capital, SoftBank Ventures, and NALA Investments.

In addition to Hulu, DramaFever also syndicates a portion of its library to Netflix, Amazon and Apple iTunes.

SIMI is linked to Japanese wireless company SoftBank, which now has a majority stake in Sprint. Earlier this month, SoftBank announced it would invest $250 million in Legendary Entertainment and form a joint venture with the movie studio. SoftBank is also rumored to have made a $3.4 billion offer to buy DreamWorks Animation.

Morrison & Foerster LLP acted as legal advisor to theSoftBank Group. The Raine Group LLC acted as financial advisor and Gunderson Dettmer acted as legal advisor to DramaFever.

Sprint To Take $160M Charge For Workforce Reduction

Mike Farrell — Fri, 03 Oct 2014 20:45:00 +0000

Wireless carrier Sprint said it will take a $160 million charge to earnings in its fiscal second quarter to cover the costs of severance packages and other expenses related to a planned workforce reduction that it said began on Sept. 30, according to a Securities and Exchange Commission filing.

Sprint said in the filing that the workforce reduction is expected to be concluded by Oct. 31.

“The plan is expected to include steps to, among other things, improve operational efficiencies and reduce costs, as a result of which the company expects to incur material charges under generally accepted accounting principles,” Sprint said in the filing. The layoffs will include management and non-management positions.

Sprint spokeswoman Roni Singleton said the company is still working through the reductions so exact numbers are not available. Sprint currently employs about 33,000 people

Sprint’s new CEO Marcelo Claure said back in August that the company, controlled by Japanese wireless carrier SoftBank which yesterday agreed to invest $250 million in movie studio Legendary Entertainment, that job cuts were “inevitable,” but didn’t know what extent they would take.

Claure was named CEO of Sprint in August. He is the former CEO of Brightstar Corp., a wireless distributor and subsidiary of SoftBank.

SoftBank to Invest $250M in Legendary

Mike Farrell — Thu, 02 Oct 2014 20:30:00 +0000

Days after it sent the stock of DreamWorks Animation into a tizzy, Japanese wireless carrier SoftBank said it will invest $250 million in Legendary Entertainment and will form a joint venture with the movie studio to leverage its intellectual property and premium content worldwide.

The announcement of the investment came just days after speculation swirled that SoftBank had made a $3.4 billion offer to buy DreamWorks Animation, a possible effort to gain a content foothold for its growling technology assets. SoftBank is the third largest wireless carrier in Japan but also owns a controlling stake in U.S. wireless company Sprint and a 30% of Chinese e-commerce company Alibaba.

According to SoftBank, the Legendary joint venture will allow the carrier to exploit the studio’s intellectual property rights in television, digital, licensing and merchandising and other ancillary lines, and across various "over-the-top"/mobile platforms with a particular focus on the burgeoning China and India markets.

In a statement, vice chairman of Sofbank and CEO of SoftBank Internet and Media, Inc. (SIMI) Nikesh Arora, said the goal of the SIMI unit is to “leverage SoftBank's international platform and network of Internet and media partners to accelerate content creators' digital strategies and extend their global reach. Legendary is already a content powerhouse and we are very excited to make this investment and help them bring their incredibly successful film franchises and other exciting new media content to an even larger global audience."

SoftBank's investment is expected to close later this month, subject to certain conditions and Arora will be appointed to Legendary's board of directors as part of this investment.

DreamWorks Animation stock soared as much as 30% earlier this week after reports surfaced that SoftBank was in talks to acquire the studio. When later reports said that SoftBank had turned its attention to Legendary, the stock began to pull back.

Legendary Entertainment has produced such hits as The Dark Knight and The Hangover series of films. The company also announced a partnership with just-retired New York Yankees shortstop Derek Jeter for the digital media startup, The Players Tribune.

"Masayoshi Son has built SoftBank into one of the world's most respected companies,” said Legendary's chairman and CEO, Thomas Tull in a statement. “With the arrival of Nikesh and the launch of SIMI, they have a great opportunity to extend their reach into media and entertainment. We are excited to be one of SIMI's first partners and look forward to working together to deliver the next phase of Legendary's growth."

The Raine Group LLC acted as financial advisor and Morrison & Foerster LLP acted as legal advisor to SoftBank. Martin Willhite, COO & General Counsel represented Legendary and O'Melveny & Myers LLP acted as outside legal advisor.