Securities of the investment company SoftBank increased in price by 7%. The rise began after information emerged that the firm had entered into a deal worth $7.6 billion with telecom operator T-Mobile US. This increase in quotes turned out to be the most significant since mid-summer. Then the rise dipped slightly (to 4.23%), LBLV analysts noted.
The agreement with T-Mobile US is concluded by Sprint, which is owned by SoftBank. She has a connection with the terms of the deal signed in 2020, when the two firms merged. Earlier this week, on December 26, the Japanese investment giant announced that it would own more than 48.751 million T-Mobile shares.
The terms of the agreement stipulate that SoftBank will transfer T-Mobile securities if the 45-day rolling average value exceeds $150 over a certain period of time. This condition will begin to apply 2 years after the closing of the transaction, until the completion of 2025. The agreement will double the share of T-Mobile owned by SoftBank (from 3.75% to 7.64%).
In 2023, the growth rate of SoftBank shares was below the market average
Combination assets of T-Mobile and Sprint is one of the largest transactions for the industry. Its final price was about $37 billion. In 2023, Softbank was gradually raising capital and increasing the volume of investments with the expectation of improving the market situation in the coming year. The head of the company was a key investor in startup projects at the final stages, but suffered losses due to a series of failures, which included WeWork going bankrupt.
SoftBank quotes have increased in price by only 14%. Over the same period of time, the Nikkei 225 rose by 30%. LBLV analysts estimate that the shares of this company are being traded at a discount of 45.5% to the asset price.
Vladislav Papush, financial analyst at LBLV