Signage at a SoftBank Corp. store in the Ginza district of Tokyo, Japan, on Wednesday, Nov. 1, 2023.
Kiyoshi Ota | Bloomberg | Getty Images
Masayoshi Son's conglomerate said late on Tuesday it had told T-Mobile U.S. to issue 48.75 million shares in common stock to it after conditions set out in an agreement made as part of the merger of SoftBank's U.S. telco Sprint and T-Mobile were met.
The transaction bolsters the listed assets in SoftBank's portfolio, doubling its T-Mobile U.S. stake to 7.64% from 3.75% currently, following the blockbuster listing of chip designer Arm in September.
"This increases the proportion of listed, measurable equity in hand on (SoftBank Group's) balance sheet, and, even better, proportions of marginable equity relative to indebtedness," Macquarie analyst Paul Golding wrote in a client note.
SoftBank's shares have gained only around 14% year-to-date, compared with an almost 30% rise in the benchmark index. The group trades at a discount of around 45.5% to the value of its assets, according to Macquarie calculations.
Son has been a leading investor in late stage startups but has suffered a series of reversals including the bankruptcy of office-sharing firm WeWork, which was once the most valuable U.S. startup.
The T-Mobile U.S. transaction bumps SoftBank's internal rate of return on its Sprint investment to 25.5%.
Other positives for the company include the recent rally in Arm's shares, which closed on Tuesday around 44% above the initial public offering price.