SoftBank gets $7.6 billion T-Mobile stake windfall, shares soar

SoftBank Group Corp's stocks surged 5 per cent after the announcement that it would acquire T-Mobile US shares valued at $7.59 billion without any extra expenses. 

Under Masayoshi Son's leadership, the conglomerate directed T-Mobile US to issue 48.75 million shares as part of the Sprint and T-Mobile merger agreement, doubling SoftBank's stake in T-Mobile US from 3.75 per cent to 7.64 per cent. This move strengthened the company's listed assets, particularly following the successful Arm listing in September. Macquarie analyst Paul Golding noted this as a strategic increase in measurable equity on SoftBank's balance sheet, improving equity-to-debt ratios. 

Despite SoftBank's shares only seeing a modest 14 per cent gain year-to-date compared to the benchmark index's 30 per cent, it still trades at a 45.5 per cent discount based on its asset value as per Macquarie's assessment. Masayoshi Son, renowned for late-stage startup investments, faced challenges, notably WeWork's bankruptcy. However, the T-Mobile US deal elevated SoftBank's internal rate of return (IRR) on its Sprint investment to 25.5 per cent. Additionally, the post-IPO rise in Arm's shares by 44 per cent from the offering price on Tuesday was another favourable development for the company.

(With Reuters inputs)