T-Mobile US and Sprint have formally amended their definitive ‘Business Combination Agreement’, altering the proposed shareholder structure of New T-Mobile. The amendment will result in an effective exchange ratio of approximately 11.00 Sprint shares for each T-Mobile share – an increase from the originally agreed 9.75 shares. This is a result of SoftBank agreeing to surrender approximately 48.8 million T-Mobile shares acquired in the merger to New T-Mobile immediately following the closing of the transaction, making SoftBank’s effective ratio 11.31 Sprint shares per T-Mobile share.
Sprint shareholders other than SoftBank will continue to receive the original fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share, or the equivalent of approximately 9.75 Sprint shares for each T-Mobile share. Immediately following the closing of the merger – and after the surrender of shares by SoftBank – Deutsche Telekom (DT) and SoftBank are expected to hold approximately 43% and 24%, respectively, of the fully diluted New T-Mobile shares, with the remaining 33% to be held by public shareholders.
While the merger is expected to close as early as 1 April 2020, the official ‘outside date’ has been extended to 1 July 2020, meaning that either party may terminate the agreement if the transaction has not concluded by that date.