|Bid||14.90 x 910400|
|Ask||14.91 x 288200|
|Day's range||14.85 - 14.94|
|52-week range||10.41 - 16.75|
|Beta (5Y monthly)||0.60|
|PE ratio (TTM)||18.21|
|Earnings date||13 Aug 2020|
|Forward dividend & yield||0.60 (4.01%)|
|Ex-dividend date||22 Jun 2020|
|1y target est||17.40|
Deutsche Telekom <DTEGn.DE> on Tuesday denied a report that it had intensified its business relationship with China's Huawei [HWT.UL] despite security authorities' warnings. Handelsblatt newspaper earlier on Tuesday cited confidential documents as showing the German firm had increased its dependency on Huawei as a supplier for its 5G network and broadband expansion, cloud service and television offering. It said Telekom had also asked Huawei to give it a technological edge in Germany over its competitors to make it the country's top 5G network provider.
There is great comfort to be found in regular, reliable dividend payouts – especially in times of economic uncertainty. But finding shares that can pay them is...
(Bloomberg Opinion) -- One more item for Germany’s to-do list following the Wirecard scandal: Reassess the country’s two-tier board system.German companies are run by executives on a management board. Above them sits a supervisory board of non-executives, whose explicit duties are appointing, supervising and advising the managers. A longstanding question is whether these supervisory boards properly protect investors’ interests.Wirecard, now accused by auditor Ernst & Young of “an elaborate and sophisticated fraud,” should rekindle the debate.For starters, the composition of Wirecard AG’s supervisory board didn’t keep up with the increasing complexity of the company. It had only three members until June 2016, when it grew to five. Being so small, the board chose not to create dedicated committees for audit or risk and compliance until early 2019. When they were created, it was amid mounting pressure on the company following the Financial Times’s dogged investigation into its suspect accounting.Now consider how the supervisory board described its duties. The language of the board’s most recent yearly summary (for 2018) was more about observing than taking action. The directors kept themselves “intensively informed” about the “development, position and perspectives” of the group. Their function was to “monitor.” The board performed the “tasks incumbent on it pursuant to the law,” implying a box-ticking mindset.It took yet more pressure from the FT before Wirecard engaged KPMG for an independent audit last October.Of course, KPMG’s review wasn’t completed due to obstruction by Wirecard and partner companies. For hedge fund TCI Fund Management Ltd, that failure also raised questions about the supervisory board’s ability to be more than a passive observer. TCI wrote publicly to supervisory board chairman Thomas Eichelmann, asking why he hadn’t intervened when it was clear KPMG couldn’t finish its job.As TCI pointed out, the German Stock Corporation Act says supervisory board members have a duty of care to the company, and are liable for damages if they breach that duty. But there is a question here about whether the "supervisory" nature of the role is too weakly defined in the Act and the German corporate code. Wirecard is sadly not the only corporate disgrace in Germany in recent history. It follows the Dieselgate emissions-rigging debacle and the Siemens AG bribery scandal from almost 15 years ago.For example, the German corporate governance code says supervisory board members can serve for 12 years before their length of service prevents them being deemed independent. Wulf Matthias was in the role at Wirecard for more than 11 years before stepping down in January. True, some chairmen of DAX index constituents have served longer, for example at Deutsche Telekom AG and some family-controlled companies. But it is generally accepted that boards benefit from fresh leadership at least every decade. The equivalent limit in the U.K. corporate governance code is nine years.To be sure, there’s no reason why a two-tier board system can’t be effective. But it requires supervisory boards to have a clear remit, to be properly accountable and to attract the best talent with an interventionist mindset. Germany needs to ask whether its current regime really fosters that.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- SoftBank Group Corp. offloaded a large chunk of its stake in wireless carrier T-Mobile US Inc. stake at a discount, cementing a series of transactions that could fetch as much as $20 billion for the Japanese investment giant.The Tokyo-based company raised $14.8 billion from a sale of T-Mobile shares to institutional investors, SoftBank said in a statement. The offering of 143.4 million shares was priced at $103 apiece, representing a 3.9% discount to T-Mobile’s record high closing price on Tuesday.SoftBank is set to raise another $4.1 billion through several related deals that will see shares sold to Marcelo Claure, a T-Mobile board member, and other investors, according to the statement Wednesday. The total proceeds would rise to $20 billion if so-called over-allotment options are exercised.The deals are part of SoftBank’s broader $42 billion push to unload assets to finance stock buybacks and pay down debt. Masayoshi Son, the company’s founder, is dealing with steep losses in his Vision Fund after writing down the value of investments in the sharing economy from WeWork to Uber Technologies Inc.T-Mobile’s controlling shareholder, Germany’s Deutsche Telekom AG, has also been granted the right to buy 101.5 million shares in the U.S. carrier currently held by SoftBank, according to the statement. The stake is worth about $10.9 billion based on Wednesday’s closing price. Deutsche Telekom can exercise its options to buy the stock up to June 2024, according to a T-Mobile filing.SoftBank will now turn its attention to other assets in its portfolio and may pursue an outright sale of part of its stake in e-commerce giant Alibaba Group Holding Ltd. Son has said $11.5 billion raised from issuing contracts to sell stock in the Chinese company was a first step toward unwinding more of its holdings. SoftBank also plans to sell a 5% stake in its Japanese wireless subsidiary.Read more: SoftBank to Sell Slice of T-Mobile in a $21 Billion DealSoftBank agreed to pay T-Mobile $300 million as part of the transaction and will cover all fees and expenses related to the deal. The company became a co-owner of T-Mobile with Deutsche Telekom after the carrier took over Sprint Corp. this year in a $26.5 billion merger.SoftBank “needs to further enhance its cash reserves,” the Japanese company said in a statement on Tuesday, citing concerns for “a second and third wave of spread of Covid-19.” The Japanese investment giant may invest the proceeds in high-quality securities until they are used for buybacks or debt reductions.The stock offering was overseen by Goldman Sachs Group Inc., Morgan Stanley, Citigroup Inc., JPMorgan Chase & Co., Barclays Plc, Bank of America Corp., Deutsche Bank AG and Mizuho Financial Group Inc. PJT Partners Inc. served as financial adviser to T-Mobile’s board.(Updates with details of related transactions from third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- As Japan’s SoftBank Group Corp. unloads about 200 million shares of T-Mobile US Inc., more investors get a chance to own a top-performing stock that had been hogged by insiders. SoftBank’s fire sale isn’t a knock on T-Mobile, but rather a reluctant move by billionaire Masayoshi Son to shore up his own troubled conglomerate. Indeed, his loss will be someone else’s gain. Son took control of Sprint Corp. in 2013 and then spent years pursuing a merger between the beleaguered wireless carrier and its stronger rival, T-Mobile. He finally got his way thanks to the Trump administration’s lax regulators at the Justice Department and Federal Communications Commission. Their focus on America’s standing in the so-called race to 5G, the next generation of wireless connectivity, overshadowed the antitrust concerns. Sprint officially became part of T-Mobile in April, handing SoftBank ownership of about 25% of the combined company; another 44% is owned by Deutsche Telekom AG. Until this week, that left only a small public float for a stock that’s long been the envy of its industry — and will likely continue to be.After the implosion of office-space rental company WeWork Cos. and the Covid-19 pandemic, SoftBank suffered record losses from its investments and is in need of cash. In turn, the company is undertaking a series of complex transactions to exit most of its T-Mobile stake, generating about $20 billion in proceeds. The deal involves a public equity offering, a rights offering to existing shareholders, a private trust vehicle and a call option for Deutsche Telekom to increase its ownership of T-Mobile down the road when its own balance sheet is in better shape. The transactions are structured so that even though more T-Mobile shares will be available to the public, the total number of shares outstanding won’t change. T-Mobile also gets $300 million for playing banker. T-Mobile’s stock price closed at an all-time high of $107.16 on Tuesday. After the market closed, the shares SoftBank is selling priced at $103 apiece, according to a CNBC report.T-Mobile’s subscriber base, revenue and stock price are all expected to continue growing for the foreseeable future at a faster clip than that of its two larger rivals, Verizon Communications Inc. and AT&T Inc. Its consumer appeal comes from offering cheaper data plans on a network that has improved tremendously over the years, as well as a friendlier customer-service experience. Led by a larger-than-life CEO whose magenta wardrobe made him a walking T-Mobile billboard, the company was able to distinguish itself over time as a fun brand in an otherwise drab industry. That CEO, John Legere, left after sealing the Sprint deal and was replaced by Mike Sievert. The SoftBank share sale is also a farewell performance for Braxton Carter, T-Mobile’s pink cowboy hat-wearing chief financial officer, who retires next week. The Sprint merger fundamentally changed the industry by eliminating a low-cost rival that T-Mobile competed with most. T-Mobile’s own porting ratios, a measure of how many customers one carrier steals from another, showed that it was consistently taking a bigger bite out of Sprint’s subscriber base than either Verizon or AT&T’s. Now that the deal is done, T-Mobile would seem to have two options: 1) Given that there’s so much extra capacity on its network to handle more subscribers, it could cut prices even more. That would supercharge its own growth while putting pressure on AT&T and Verizon. 2) Instead, T-Mobile could keep prices flat or even raise them to improve profit margins more immediately, leaving competition more stagnant. The latter option is the less innovative, less consumer-friendly route that was feared by opponents of the Sprint takeover. (T-Mobile’s 13-hour outage on its network last week also doesn’t help to quell the fear that the industry is insufficiently regulated.) Here’s how different T-Mobile’s profitability might look if it were to adopt AT&T’s pricing:In either case, it may be a win-win for investors. T-Mobile executives predict that it will save more than $40 billion in costs due to the Sprint deal, much of which will come from job cuts and shutting stores in overlapping locations (another reason the transaction was criticized). Wireless carriers also rely on costly ad campaigns to promote their networks. The combined T-Mobile-Sprint will now be able to save about $700 million a year just from lower advertising expenses, according to a report earlier this month by Jonathan Chaplin, an analyst for New Street Research.Chaplin expects T-Mobile to pursue the less aggressive avenue of growth, but even then he sees its stock price doubling over the next three to five years. Analysts are generally less optimistic about AT&T and Verizon, as one undergoes a difficult transformation into a communications and entertainment colossus, while the other remains almost singularly focused on 5G with a less-than-ideal set of wireless spectrum. After buying Sprint, T-Mobile’s future looks to be either grow fast or grow faster. Still, this week’s news shows that for a merger pumped up on American 5G zeal and patriotism, the biggest beneficiary just might be a Japanese billionaire short on cash.(Adds pricing information in the fourth paragraph.)This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- SoftBank Group Corp., under pressure to raise capital after record losses in its investment business, is unloading part of its stake in wireless carrier T-Mobile US Inc. in a $21 billion deal.The transaction, along with a plan to sell a 5% stake in its Japanese wireless subsidiary, is part of a broader $42 billion push by SoftBank to unload assets to finance stock buybacks and pay down debt. Masayoshi Son, the company’s founder, is dealing with steep losses in his Vision Fund after writing down the value of investments in the sharing economy from WeWork to Uber Technologies Inc.SoftBank’s shares gained as much as 3% in Tokyo. The Japanese investment giant will now turn its attention to other assets in its portfolio and may pursue an outright sale of part of its stake in Chinese e-commerce giant Alibaba Group Holding Ltd. Son has said $11.5 billion raised from issuing contracts to sell stock in Asia’s largest corporation was a first step toward unwinding more of its holdings.SoftBank “needs to further enhance its cash reserves,” the Japanese company said in a statement on Tuesday, citing concerns for “a second and third wave of spread of Covid-19.” The company may invest the proceeds in high-quality securities until they are used for buybacks or debt reductions, it added.Read more: SoftBank Wraps Up $4.7 Billion Share Buyback in Three MonthsThe Japanese company is trying to shore up a balance sheet devastated by writedowns that triggered a record 1.9 trillion yen ($18 billion) loss last fiscal year at the Vision Fund. As concerns about investments mounted, Son responded with share repurchases in rapid succession, completing a $4.7 billion buyback program in just three months.As part of a complex series of transactions unveiled Tuesday, T-Mobile will hold a public offering of 133.5 million shares of its common stock, the carrier said in a statement. It also will grant the underwriters 10 million shares. Additionally, T-Mobile intends to sell as many as 30 million common shares to a Delaware statutory trust.Five million shares will be sold to an entity controlled by Marcelo Claure, a SoftBank executive and T-Mobile board member, with funding coming from SoftBank. And T-Mobile will have the right to buy almost 20 million shares. Altogether, as many as 198.3 million shares owned by SoftBank will be transferred.SoftBank secured the stake in T-Mobile US just this year, after U.S. regulators approved the American wireless carrier’s $26.5 billion takeover of Sprint Corp. T-Mobile’s market value is about $132 billion.Read more: SoftBank’s Vision Fund Loses $17.7 Billion on WeWork, Uber (2)T-Mobile stock closed at $106.60 Monday in New York, putting the value of the 198 million shares at about $21 billion. They had been up 36% this year through Monday’s close.Both companies had said earlier they are discussing a possible deal. Even before the transaction, Deutsche Telekom AG was the controlling shareholder of T-Mobile due to how voting rights were structured following the Sprint deal.The stock offering, due to trade June 24, will be overseen by Goldman Sachs Group Inc., Morgan Stanley, Citigroup Inc., JPMorgan Chase & Co., Barclays Plc, Bank of America Corp., Deutsche Bank AG and Mizuho Financial Group Inc. PJT Partners served as financial adviser to T-Mobile’s board. SoftBank said it will pay T-Mobile $300 million as part of the transaction and will cover all fees and expenses related to the deal.(Updates with SoftBank’s shares from the third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Deutsche Telekom announced that it is in talks to acquire stakes in its U.S. subsidiary T-Mobile from Japanese multinational conglomerate holding company Softbank.
Deutsche Telekom <DTEGn.DE> is in talks to buy out shares in its U.S. unit T-Mobile <TMUS.O> from Japan's Softbank <9984.T>, CEO Tim Hoettges said on Friday, noting that under a shareholder agreement it has the right of first refusal. Hoettges, answering a question at Deutsche Telekom's annual general meeting, said Softbank was seeking to sell down its stake due to "heightened liquidity needs arising from the demanding economic environment".
Deutsche Telekom boss Tim Hoettges has his sights on becoming market leader in the United States, setting a high bar for U.S. unit T-Mobile after its $23 billion takeover of Sprint. "We will become No.1 in the United States," Hoettges said in a bullish speech to Deutsche Telekom's annual general meeting on Friday, held online this year due to the COVID-19 pandemic. Hoettges also pledged that Deutsche Telekom would become the No.1 fibre-optic company in Germany and Europe as well as the leader in next-generation 5G networks.
Deutsche Telekom <DTEGn.DE> will retain control of T-Mobile <TMUS.O> should Japan's Softbank <9984.T> liquidate its stake, CEO Tim Hoettges said on Friday as he vowed to claim top spot in the U.S. market. Speaking at the German group's annual general meeting, Hoettges said that Softbank wants to reduce its 23% stake in U.S. operator T-Mobile to bolster its finances because of the demanding economic environment. Deutsche Telekom has the right of first refusal under a four-year shareholder pact that took effect when T-Mobile's $23 billion takeover of rival Sprint closed in April, he added.
The Deutsche Telekom Ag (ETR:DTE) share price has risen by 7.70% over the past month and it’s currently trading at 14.965. For investors considering whether to...
Bloomberg reported last month that SoftBank was nearing an agreement to sell about $20 billion of its T-Mobile U.S. shares to investors, including Deutsche Telekom, T-Mobile’s controlling shareholder, in an effort to offset major losses from its investment business, including the Vision Fund. In today’s notice, SoftBank Group, which owns about 25% of T-Mobile U.S. shares, said it is exploring transactions that could include private placements or public offerings and transactions with T-Mobile or its shareholders, including Deutsche Telekom AG, or third parties.
(Bloomberg) -- SoftBank Group Corp. said it is considering the sale of its T-Mobile US Inc. shares, confirming reports the Japanese company is nearing such a deal as part of its effort to sell about $41 billion in assets.SoftBank said it may sell some of its stake through private placements or public offerings, adding that there is no assurance a final deal will be reached. T-Mobile also confirmed SoftBank’s plan and wasn’t specific about the details, saying that SoftBank was exploring “one or more monetization transactions” involving the wireless carrier’s stock. People familiar with the matter said last month that SoftBank was closing in on an agreement to sell about $20 billion of its stock in T-Mobile, part of efforts to raise capital after record losses in its investment business.“These transactions may include one or more of: private placements or public offerings; privately negotiated transactions with T-Mobile or one or more stockholders of T-Mobile, including Deutsche Telekom, or third parties,” T-Mobile said Monday in a regulatory filing.SoftBank, which owns about 25% of T-Mobile US, is expected to sell a slice of that holding to Deutsche Telekom AG, giving the German co-owner a majority stake. SoftBank would then sell shares in a secondary offering to other investors and retain a smaller stake itself, a person familiar with the deliberations said previously.SoftBank founder Masayoshi Son acquired the stake in T-Mobile earlier this year, when U.S. regulators approved the sale of his Sprint Corp. to its wireless rival.He is currently selling tens of billions of dollars in assets to raise cash so he can buy back shares and pay down debt. Among his other prime assets are Chinese e-commerce giant Alibaba Group Holding Ltd. and SoftBank Corp., the Japanese wireless business.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Aircall, which makes cloud-based software that can help businesses create virtual call centers, said it raised $65 million in its latest funding round as a surge in remote working makes its products more popular.The startup, whose product can be used to add analysis, routing, contact sharing and customer management functions to voice calls, will use the funds to add about 150 employees and expand geographically, Chief Operating Officer Jonathan Anguelov said. The Paris-based company is now valued at about $500 million.Customers have needed to find ways to maintain customer service call centers while employees work remotely, leading to a surge in users, he said. New customers include food delivery startup DoorDash Inc. The company is also adding features to improve sales and service, such as a feature that analyzes the emotion in customers’ voices, he said.“Covid indirectly created a big move toward the cloud,” Anguelov said in an interview. “Decisions were made fast during that period.”Remote working startups have experienced a boom in funding. The valuation of Monday.com, an Israeli startup that makes software to help employees work remotely, jumped to $2.7 billion, according to people familiar with the matter. Deel, a payroll company for remote workers, recently raised $14 million.Deutsche Telekom AG’s venture capital arm led Aircall’s funding round, which also included a new investment from Swisscom AG and fresh funds from existing investors Balderton Capital and Draper Esprit. It brings the company’s total funding to $100 million.Subscription-based Aircall, which gets about one-third of its business from North America, will seek to expand in Europe and North America this year and in Asia Pacific toward the end of 2020, Anguelov said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Peter Chou, the man who led HTC Corp. through its most prosperous years as an Android phone maker, is returning to consumer electronics with the unveiling of a new virtual reality headset, platform and company.Called XRSpace, the project has been in the works for three years and its centerpiece is a mobile VR headset equipped with fifth-generation wireless networking and over three hours of battery life. Partnering with Deutsche Telekom AG and Chunghwa Telecom Co., XRSpace is also building the VR platform on which services, games and social activities can be accessed and experienced.Priced at $599, the XRSpace headset has a high cost of entry, but the company envisions bundling it with carriers’ 5G service packages or in other forms for educational institutions. After its home market of Taiwan, it’ll look to expand to the U.S. and Europe, Chou said in an interview with Bloomberg News, with the rest of Asia to follow.Chou’s headset is the latest in a long line of devices like Facebook Inc.’s Oculus Rift, which have tried to bring VR into the mainstream without much success so far. The XRSpace gadget is still months away from store shelves and few have had a chance to test or even view it. But the entrepreneur says he’s already signed up 40 to 50 apps for his VR platform.XRSpace’s ambition is to come up with uses for the 5G networks that carriers are rolling out globally.“5G is coming. It feels like 2002, when we first had 2.5G data networks and the first smartphones like the O2 XDA started coming out,” Chou said. “Today, the smartphone experience of togetherness is primitive” because it fails to capture the full range of human expression. XRSpace’s headset uses cameras to pick up hand gestures and track the wearer’s motions, and it creates a lifelike avatar from a selfie. Chou promised it’ll let users perform real-world actions like shaking hands or shooting a basketball in a natural way.The XRSpace founder quit HTC after the popularity of its smartphones waned, but now he’s hoping VR will help a comeback.To build its virtual world, XRSpace has been designing public and private spaces for users to inhabit and even creating virtual stadiums where sports fans can gather together for a shared viewing of a ballgame. The coronavirus outbreak has triggered an uptick in interest in shared remote experiences, as signaled by rapper Travis Scott’s virtual concert in the game Fortnite and Sony Corp.’s Chief Executive Officer Kenichiro Yoshida expressing interest in streaming live concerts to the company’s PlayStation VR headset.Read more: Fortnite, Rappers and the Billion-Dollar Pandemic Gaming BoomThe pandemic was initially an obstacle for XRSpace, whose launch had been planned for Mobile World Congress in Barcelona in February, one of the first global events to be canceled by the spread of the virus. Chou said that manufacturing was set back by roughly two months because of it, and the XRSpace headset is now expected to launch in the third quarter of this year, starting with Taiwan where the company has the most partnerships lined up.But the upside for XRSpace, according to Head of Content Kurt Liu, is that many more interested parties -- such as educational institutions asking about distance learning and collaboration tools -- have been reaching out. Liu’s team has been working with hundreds of developers since last year and already has more than 40 apps embedded in the platform, he said. Those include games as well as wellness and relaxation applications, for which the company has recruited health care experts with decades of experience.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- SoftBank Group Corp. is closing in on a deal to sell about $20 billion of its stock in T-Mobile US Inc., accelerating efforts to raise capital after record losses in its investment business, according to people familiar with the matter.The Tokyo-based company, which owns about 25% of T-Mobile US, plans to sell a slice of that stake to Deutsche Telekom AG so the German parent can own a majority and consolidate the unit’s financial results, said the people, asking not to be identified because the matter is private. SoftBank would then sell shares in a secondary offering to other investors and retain a smaller stake itself, one of the people said. The deal could be announced this week, the person said.Talks are still ongoing and the deal could change or fall apart. T-Mobile US’s market value is about $126 billion, while SoftBank’s stake is about $31 billion.SoftBank founder Masayoshi Son landed the stake in T-Mobile US just this year, after U.S. regulators approved the sale of his Sprint Corp. to its wireless rival. He is in the midst of selling 4.5 trillion yen ($42 billion) of assets to raise cash so he can buy back shares and pay down debt. Among his other prime assets are Chinese e-commerce giant Alibaba Group Holding Ltd. and SoftBank Corp., the Japanese wireless business.“If SoftBank Group can renegotiate that sale, it will reduce pressure on SoftBank Group to sell its stakes in Alibaba or SoftBank Corp.,” Atul Goyal, senior analyst at Jefferies Group, wrote in a report.The company already raised $11.5 billion from contracts to sell shares in Alibaba, its most valuable holding. Son said at an earnings briefing on Monday that the sale is the first tranche in a broader unwinding of assets.Dow Jones, which reported the T-Mobile US sale earlier, said Morgan Stanley and Goldman Sachs Group Inc. are working to draw investors for the deal.Long-term ControlAny potential sale could tip Deutsche Telekom’s stake in T-Mobile over 50%. The German carrier currently holds 43.6% and is already the controlling shareholder due to how voting rights were structured following the Sprint deal. A 7% stake in T-Mobile would be worth about $8.2 billion, according to New Street Research analyst James Ratzer.“Another buyer might be willing to pay a higher price than Deutsche Telekom, so going to 50% now would secure longer-term control,” Ratzer said in a note.T-Mobile completed its $26.5 billion takeover of Sprint on April 1, making it the second-largest mobile carrier in the U.S. based on the number of regular monthly subscribers. T-Mobile is the nation’s fastest-growing wireless company, and Deutsche Telekom’s largest source of revenue.On a Deutsche Telekom earnings call last week, Chief Executive Officer Tim Hoettges was asked if the company would be interested in buying a larger stake in T-Mobile from SoftBank.“It’s a great business to have, big attractive opportunities going forward -- we believe in the stock,” he said, adding that he could not “speculate on anything around these M&A talks.”Deutsche Telekom’s shares rose 1.5% in early trading on Tuesday.SoftBank and Deutsche Telekom are in the first months of a four-year lockup period that restricts the sale of T-Mobile shares. But the merger agreement doesn’t stop the companies from transferring stock between SoftBank and Deutsche Telekom. Even though Deutsche Telekom has a controlling stake in T-Mobile, it doesn’t have a majority stake. An outsider could purchase SoftBank’s shares when the lockup expires in 2024.SoftBank Group said on Monday that its Vision Fund lost 1.9 trillion yen in the most recent fiscal year, triggering the worst loss ever in the Japanese company’s 39-year history. SoftBank had to write down the valuations of companies like WeWork and Uber Technologies Inc. because of business missteps and the coronavirus fallout.The Japanese company also said on Monday it plans to spend up to 500 billion yen to buy back shares through next March, on top of an existing repurchase plan of the same size. That has helped SoftBank shares stabilize, rising more than 70% from their low in March.The stock fell about 2% in Tokyo on Tuesday, as Japan’s indexes rose.(Updated with additional context)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Ciena (CIEN) gets selected by the wholesale arm of Deutsche Telekom for the deployment of its WaveLogic 5 Extreme network across Europe for advanced connectivity solutions.
(Bloomberg Opinion) -- SoftBank Group Corp.’s flagship, $98.6 billion Vision Fund is almost tapped out. Its holdings of unicorn startups aren’t likely to deliver cash to investors anytime soon.Yet SoftBank needs liquidity, and there’s talk that the Saudi government’s Public Investment Fund may be looking to monetize its stake through a margin loan. (The PIF denied a Bloomberg News report that it has such plans). An answer to both problems would be to list shares in the Vision Fund itself, a topic that has been given scant regard as people focus on the underlying investments.Hear me out, though.The fund’s two biggest holdings right now are Chinese content-platform Bytedance Inc. and ride-hailing leader Didi Chuxing. There’s slim chance that either will have an initial public offering this year, and probably not in the U.S., where the mood toward Chinese companies has soured after the Luckin Coffee Inc. scandal. Too bad for them: All the dollars printed by Washington to tackle the Covid-19 economic crisis might mean there’s plenty of money sitting around waiting for a big new share sale. Of the 88 investments in the Vision Fund’s portfolio, 50 had a cut in valuation during the 12 months to March 31, and 19 were unchanged. SoftBank told investors Monday that its startups are facing varying degrees of impact from the pandemic, which means it’s probably not an opportune time to try to sell any individual company in public markets.But as a collective, the portfolio makes as good an asset as anything else SoftBank has on hand. It’s possible that SoftBank will be able to offload some of the T-Mobile US Inc. shares that replaced its stake in Sprint Corp. after the operators merged. According to the Wall Street Journal, T-Mobile’s parent, Deutsche Telekom AG, is considering a purchase. But there are various lockup clauses and share price incentives built into the deal that probably limit the size of any such transaction.I talked before about the need for SoftBank to sell down its $137 billion stake in Alibaba Group Holding Ltd. after it said that it would monetize as much as $41 billion in assets. Let’s be clear: “Monetizing” doesn’t necessarily mean selling. SoftBank’s strategy has largely been to take out loans backed by its assets, some of which are non-recourse.(1)There’s also British semiconductor maker Arm, which we already know is slated for an eventual IPO. The current state of SoftBank’s finances make it likely this listing will be fast-tracked.But these holdings — T-Mobile, Alibaba, Arm(2) — are SoftBank assets. Selling them doesn’t necessarily solve the Vision Fund’s cash needs. And they don’t much help the fund’s sugar daddy, the Saudi government. As my colleague David Fickling wrote recently, the net financial assets held by Saudi Arabia’s government have declined to just 0.1% of gross domestic product, from 50% in the four years through 2018. Being one of the world’s biggest oil producers helps only so much when a global pandemic grounds aircraft, sends economies into decline, and results in sliding crude prices. Even if the PIF denies plans to take out loans against its Vision Fund stake, the kingdom’s rulers will be keen that it raise cash any way possible. The Vision Fund itself needs money. It’s on the hook for at least $3 billion in preferred equity dividend payments every year, as well as the cash it needs just to operate, and in theory to service debt it’s already taken out. It has already put some of the money raised aside to pay those dividends, but that won't last forever. With the book value of its assets dropping more than $17 billion in the past year, the fund’s ability to keep borrowing to cover those requirements will diminish.There are bound to be investors who believe in founder Masayoshi Son’s long-term plan to build a stable of companies that will change the world and provide huge profits in the process. After all, many have already bought into SoftBank Group itself, which counts the Vision Fund as a key earnings driver (or drag).Given how illiquid the assets are, and the volatile nature of its earnings, a listing of the Vision Fund would certainly be seen as a bizarre move. But to Son and his acolytes, it may well be seen as visionary.(1) Non-recourse means that if the debt can't be paid, or other clauses are triggered, the creditor may take ownership of the pledged asset rather than forcing the debtor to pay up.(2) A portion of Arm shares are held by the Vision Fund, transferred from SoftBank as an in-kind payment to cover SB's obligations to the Fund.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
SoftBank Group Corp <9984.T> is in talks to sell "a significant portion" of its T-Mobile US <TMUS.O> stake to controlling shareholder Deutsche Telekom AG <DTEGn.DE>, the Wall Street Journal reported on Monday, citing unidentified sources. A deal would see Deutsche Telekom's stake in the carrier, which merged with SoftBank's wireless unit Sprint last month, rise above 50%, the report said.
SoftBank Group Corp is in talks to sell "a significant portion" of its T-Mobile US stake to controlling shareholder Deutsche Telekom AG, the Wall Street Journal reported on Monday, citing unidentified sources. A deal would see Deutsche Telekom's stake in the carrier, which merged with SoftBank's wireless unit Sprint last month, rise above 50%, the report said.
(Bloomberg) -- SoftBank Group Corp. doubled the amount it plans to spend buying back shares and announced changes to its board, including the resignation of long-time director Jack Ma.The company plans to repurchase as much as 500 billion yen ($4.7 billion) worth of its own stock by March 2021, it said in a statement. That’s on top of an equally sized repurchase it had announced in mid-March.The Tokyo-based company also announced several changes to its board, including the departure of Ma, the co-founder of Alibaba Group Holding Ltd. Three new directors have been nominated, including Chief Financial Officer Yoshimitsu Goto. SoftBank shares rose as much as 3%.SoftBank, led by founder Masayoshi Son, is buying back shares to bolster its stock price after its portfolio of startup investments lost value. The company expects to book a record 1.35 trillion yen operating loss for the year ended March 31 when it reports financial results Monday afternoon in Tokyo. After aggressively investing in startups in recent years, SoftBank is marking down the value of stakes in companies such as WeWork, Oyo Hotels and Uber Technologies Inc.“The buyback announcement is a surprise, given the slew of low expectations and bad news,” said Justin Tang, head of Asian research at United First Partners.SoftBank plans to fund the buybacks in part through the sale of stakes in Alibaba and T-Mobile US Inc., Bloomberg News has reported. SoftBank is now in talks to sell a “significant portion” of T-Mobile US to controlling shareholder Deutsche Telekom AG, Dow Jones reported.The company said on Friday that it had bought 250.6 billion yen of its own stock since March 13 under the original re-purchase plan, about half of the 500 billion yen budget.Read more: SoftBank’s $23 Billion Buyback Helps Investors Ignore Profit HitThat first buyback, announced in mid-March, initially failed to lift SoftBank’s stock amid concerns the conglomerate’s portfolio of startups is vulnerable to the economic shock from the coronavirus pandemic. When the shares plunged more than 30% in the week that followed, Son took an unprecedented step to unveil a broader plan to repurchase as much as 2 trillion yen, without detailing the timing. The latest announcement is part of that broader plan.“Son is also sending a message that he is serious about funding that 2 trillion yen buyback he announced in March,” Tang said.The stock gained almost 70% since SoftBank said it plans to sell assets to raise as much as 4.5 trillion yen over the coming year to buy shares and slash debt.Read more: SoftBank Heads for Record Loss After $80 Billion Startup SpreeThe company’s Vision Fund business, focused on technology investments that contributed more than half of its reported profit a year ago, has swung to a projected 1.8 trillion yen loss. The company’s overall net loss will likely reach 900 billion yen.Son’s increasingly risky bets over the past few years coincided with departures from SoftBank’s board of some of it most outspoken members. Shigenobu Nagamori, the founder of motor maker Nidec Corp., stepped down in 2017, while Fast Retailing Co. Chief Executive Officer Tadashi Yanai left last December. When Paul Singer’s Elliott Management Corp. disclosed in February that is has built a stake of close to $3 billion in SoftBank, one of its requests was to increase the number of independent directors.Ma’s departure is a historic moment since he and Son have sat on each other’s boards for years. Alibaba is regarded as Son’s most successful investment. In addition to Goto, a long-time SoftBank veteran, Lip-Bu Tan and Yuko Kawamoto will join, bringing the total of external board members to four.Tan is a founder and chairman of Walden International, a venture capital firm based in San Francisco, and CEO of Cadence Design Systems Inc. He holds a master’s degree in nuclear engineering from the Massachusetts Institute of Technology and received an MBA from the University of San Francisco.Kawamoto is a professor at Waseda University whose subjects include corporate governance. She holds a bachelor’s degree in social psychology from the University of Tokyo, a master’s degree in development economics from Oxford University and spent years working at McKinsey & Co. Kawamoto will be SoftBank’s sole female board member.(Updates with details of asset sales in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Deutsche Telekom Ag (ETR:DTE) share price has risen by 9.43% over the past month and it’s currently trading at 13.78. For investors considering whether to8230;