May 2013
| Business World Magazine | 11
HARD
SELL FOR
SOFTBANK
A deal that would lead to Japan’s mobile carrier of Softbank assuming a majority share in Sprint Nextel
gained major traction this month by securing approval from the Committee on Foreign Investment in
the United States (CFIUS). In a filing with the U.S. Securities and Exchange Commission, CFIUS deter-
mined the $20 billion acquisition did not pose particular national security issues despite expression of
concern by U.S. Senator Chuck Schumer of New York. Schumer’s criticism was compelled by Softbank’s
reliance on Chinese networking equipment and concern that the exchange could lead to
U.S. networks becoming more vulnerable to hackers and spies. The panel’s approval was
ultimately provided with a caveat that SoftBank and Sprint hire security personnel subject
to approval by CFIUS-affiliated government agencies who will additionally be allowed
to review and approve Sprint’s equipment operators and managed-service
providers. The California Public Utilities Commission has also voted to ap-
prove the transaction in what represented the last leg of state-needed
approval. These negotiations put the deal that much closer to final
scrutinizing from the U.S. Federal Communications Commission who
has yet to rule. Meanwhile, Sprint is still weighing a more than $25
billion counteroffer from the satellite TV service company known as
Dish. SoftBank has agreed for Sprint to negotiate with Dish, who ironi-
cally, is going head-to-head against Sprint in another deal to buyout
Clearwire Corporation. Sprint Nextel, who owns more than 50% of
Clearwire’s shares, made a buyout offer of $3.40 per share acqui-
escing to pressure from shareholders. Dish has now countered with
a $4.40 per share offer which equates to $6.5 billion. Anticipate
more details to Dish out in the coming soon.
