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- Deutsche Telekom maintains majority of voting rights and consolidation of T-Mobile US
- SoftBank to sell up to 193 million T-Mobile US in connection with capital markets transactions
- Deutsche Telekom receives call options for 101 million
- T-Mobile US shares
- T-Mobile US minority shareholders benefit from $300m placement fee from SoftBank to T-Mobile US and dedicated rights offering
Deutsche Telekom and the Japanese SoftBank Group have agreed on a revised T-Mobile US shareholder structure.
Key facts:
- Deutsche Telekom has granted its consent for SoftBank to sell up to 193 million T-Mobile US shares currently under lock-up to the public market within the next six months. Marcelo Claure, CEO of SoftBank International and former CEO of Sprint, will acquire an additional five million T-Mobile US shares from T-Mobile (using shares acquired from Softbank) with the consent of Deutsche Telekom and will continue to provide his expertise on the Board of Directors of T-Mobile US.
- Deutsche Telekom receives call options on 101 million of those T-Mobile US shares remaining with SoftBank. Deutsche Telekom can flexibly execute the options until June 2024 subject to certain timing restrictions on the floating strike price options. The options have a term of four years and can be exercised flexibly in full or in partial tranches. Approximately 44 percent of the options allow for the acquisition of T-Mobile US shares at the lower of the previous trading day’s closing price or the price of the T-Mobile US shares sold in the SoftBank public offering. The remaining options allow for the acquisition at the prevailing market price at the date of exercise. These transactions are subject to approval by the relevant US regulatory authorities.
- Deutsche Telekom has the flexibility to settle the purchase price for the options in whole or in part with cash or Deutsche Telekom shares.
- The Proxy, Lock-up and ROFR (Right of first refusal) Agreement between Deutsche Telekom and SoftBank, which gives Deutsche Telekom voting power over the T-Mobile US held by SoftBank, will stay in place. An identical agreement has been entered into with Marcelo Claure in relation to the T-Mobile US shares to be acquired by him. As a result, Deutsche Telekom will continue to have access to the majority of voting rights in T-Mobile US until at least April 2024, even after the sale of the aforementioned 193 million T-Mobile US shares by SoftBank.
- T-Mobile US and its minority shareholders also benefit from the transaction: T-Mobile US will receive a structuring fee of $300 million from SoftBank for its participation in the sale of the 193 million shares. In addition, approximately 20 million T-Mobile US shares will be offered to the existing minority shareholders of T-Mobile US via a rights issue. SoftBank will also forfeit certain governance rights with respect to T-Mobile US in connection with the transaction.
Deutsche Telekom currently holds a ca. 43 percent stake in T-Mobile US. SoftBank holds around 24 percent of the T-Mobile US shares, corresponding to around 305 million T-Mobile US shares. Under the proxy agreement, Deutsche Telekom currently has control over 67 percent of the voting rights in T-Mobile US.
The planned sale of around 193 million T-Mobile US shares from SoftBank's investment and the transfer of another five million T-Mobile US shares relating to Marcelo Claure’s purchase will reduce the Japanese company's stake in T-Mobile US to around 8 percent.
If the call options were exercised in full, Deutsche Telekom would hold around 51 percent of T-Mobile US shares (on a fully diluted share basis), thereby securing a direct majority interest in T-Mobile US.
The call options over the 101 million T-Mobile US shares supplement Deutsche Telekom’s existing right of first refusal in the event SoftBank intends to sell T-Mobile US shares. Until now, SoftBank has been able to decide - within certain timing and shareholding restrictions - on the sale of T-Mobile US shares pursuant to the lock-up agreement. Under the existing right of first refusal, SoftBank would first have to offer any T-Mobile US shares to Deutsche Telekom at the then prevailing market price. In the event of Deutsche Telekom declines this offer, SoftBank could sell these T-Mobile US shares to the public market. Deutsche Telekom now has the right to determine access to the underlying T-Mobile US shares itself via the call options.
Note:
All of the above shareholdings are calculated on the basis of fully diluted outstanding shares of T-Mobile US.
Disclaimer:
IMPORTANT INFORMATION: This media information has been prepared solely for information purposes and does not constitute an offer of or a solicitation by or on behalf of Deutsche Telekom AG to subscribe for or purchase securities of Deutsche Telekom AG or as described herein. Any statements and information herein, including forward-looking statements, are not binding and are subject to change without notice at any time. The information contained herein are not intended for publication or dissemination in the United States of America or in any other jurisdiction outside the Federal Republic of Germany. The documents and information contained on this page are not an offer of securities in the United States of America. Securities may not be offered or sold in the United States of America or to "U.S. person" as defined in the U.S. Securities Act of 1933, as amended (the "Securities Act") or for the account of "U.S. persons" absent registration or an exemption from registration under the U.S. Securities Act. The securities are not and will not be registered as per the U.S. Securities Act.
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