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SoftBank to sell majority of its shares in T-Mobile

SoftBank, which owned Sprint, picked up shares of T-Mobile US through the merger of T-Mobile and Sprint. But today, SoftBank Group confirmed that it plans to sell shares of its T-Mobile holdings through private placements and public offerings. CNBC is reporting that SoftBank will sell two-thirds of its T-Mobile shares, raising about $20 billion. SoftBank owns 304.6 million T-Mobile US shares, worth about $31 billion.

“The exploration of any potential transactions will involve discussions and negotiations between or among T-Mobile and Deutsche Telekom,” stated SoftBank’s announcement.

It’s unknown whether DT will purchase any shares. The German company owns about 43% of T-Mobile. “We assume they will buy at least 7% of the shares outstanding to take their stake above 50%, with the balance being sold to the public,” writes New Street Research analyst Jonathan Chaplin in a note today.

SoftBank has had a rough go recently and is in need of cash. Its $100 billion Vision Fund has under performed. And most notably, SoftBank took a big hit from its investment in WeWork, which failed to go public after its IPO filing.

SoftBank said in March that it plans to raise $41 billion, through selling assets, in order to reduce its debt. A $20 billion sale of T-Mobile shares would get it half-way to that goal.

Of SoftBank’s interest in selling T-Mobile shares, Wells Fargo analyst Jennifer Fritzsche writes, “This is not overly surprising news and has been speculated in the wake of SoftBank's deleveraging promises. In our view - this news is driven more by factors surrounding SoftBank's balance sheet than any underlying issues at TMUS.”

Fritzsche adds that T-Mobile “continues to be the main growth vehicle of the DT portfolio of assets.”

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