T-Mobile US Inc (NASDAQ:TMUS) and Sprint Corp (NYSE:S) revealed Thursday that they have agreed on new terms for their merger, as the wireless carriers race to close the deal after overcoming a federal court challenge.
The new merger terms will reduce the stake of major Sprint shareholder SoftBank Group Corp (OTCMKTS:SFTBY), while leaving the offer to other shareholders unchanged.
The parties will improve the exchange ratio in the all-stock deal for T-Mobile’s parent, Deutsche Telekom AG, the companies said in a statement.
Under the reworked deal, SoftBank will hold about 24% of the combined entity, down from 27% under the earlier terms. T-Mobile’s parent Deutsche Telekom will hold about 43% of the combined entity, up from the 42% that the German group would have held.
Originally, 9.75 Sprint shares were to be exchanged for each T-Mobile share. Under the revised deal, SoftBank, which owns more than 80% of Sprint’s stock, will exchange the equivalent of 11 of its shares for each T-Mobile share. Sprint’s other shareholders will continue to get the original exchange ratio.
SoftBank has agreed to surrender 48.8 million T-Mobile shares to the new company, to be called T-Mobile. Those shares could be reissued to SoftBank if T-Mobile’s stock price reaches certain milestones beginning two years after the deal closes.
US District Judge Victor Marrero last week allowed the deal to proceed by rejecting arguments from a group of state attorneys general seeking to block the merger as anti-competitive.
T-Mobile said after the court ruling that it was working to close the transaction as soon as April 1.
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