Item 1.01 Entry into a Material Definitive Agreement.
On February 20, 2020, T-Mobile US, Inc. ("T-Mobile"), Sprint Corporation
("Sprint") and the other parties to the Business Combination Agreement (as
defined below) entered into Amendment No. 2 (the "Amendment") to the Business
Combination Agreement, dated as of April 29, 2018 (the "Business Combination
Agreement"), by and among T-Mobile, Sprint, Huron Merger Sub LLC, Superior
Merger Sub Corporation, Starburst I, Inc., Galaxy Investment Holdings, Inc., and
for the limited purposes set forth therein, Deutsche Telekom AG ("Deutsche
Telekom"), Deutsche Telekom Holding B.V. and SoftBank Group Corp. ("SoftBank"),
as amended by Amendment No. 1 to the Business Combination Agreement, dated
July 26, 2019. As previously disclosed, the Business Combination Agreement
provides for T-Mobile and Sprint to combine their respective businesses, on the
terms and subject to the conditions set forth in the Business Combination
Agreement (the "Merger Transactions").
The Amendment extends the Outside Date (as defined in the Business Combination
Agreement) to July 1, 2020, and further provides that the closing of the Merger
Transactions will occur on the first business day of the first month (other than
the third month of any calendar quarter) where such first business day is at
least three business days following the satisfaction or waiver of all of the
conditions to the closing of the Merger Transactions (such date, the "Closing
Date"). In addition, the Amendment modifies the commitments of the parties with
respect to actions that may be required to be taken in order to obtain any
remaining governmental consents or avoid an action or proceeding by any
governmental entity in connection with the Merger Transactions, subject to
certain limitations.
Pursuant to the Amendment, SoftBank has also agreed to indemnify T-Mobile and
its subsidiaries following the closing of the Merger Transactions against
(i) any monetary losses arising out of or resulting from certain specified
matters and (ii) the loss of value to T-Mobile and its subsidiaries arising out
of or resulting from cessation of access to spectrum of Sprint or its
subsidiaries ("Lost Spectrum") under certain circumstances, subject to
limitations and qualifications contained in the Amendment.
Concurrently with entry into the Amendment, T-Mobile, SoftBank and Deutsche
Telekom entered into a letter agreement (the "Letter Agreement"). Pursuant to
the Letter Agreement, SoftBank has agreed to cause its applicable affiliates to
surrender to T-Mobile, for no additional consideration, an aggregate of
48,751,557 shares of T-Mobile Common Stock (such number of shares, the "SoftBank
Specified Shares Amount"), effective immediately following the Effective Time
(as defined in the Business Combination Agreement). Immediately following such
surrender, Deutsche Telekom and SoftBank are expected to hold approximately 43%
and 24%, respectively, of the fully diluted shares of T-Mobile Common Stock,
with the remaining approximately 33% of the fully diluted shares of T-Mobile
Common Stock held by public stockholders. The Letter Agreement further provides
that if the trailing 45-day volume-weighted average price per share of T-Mobile
Common Stock on the NASDAQ Global Select Market is equal to or greater than
$150.00 at any time during the period commencing on the second anniversary of
the Closing Date and ending on December 31, 2025 (or, if the Closing Date is on
or after May 1, 2020 and SoftBank so elects no later than June 1, 2020, $150.00
at any time during the period commencing on the second anniversary of the
Closing Date and ending on the fifth anniversary of the Closing Date or $160.00
at any time during the period following the fifth anniversary of the Closing
Date and ending on the sixth anniversary of the Closing Date), T-Mobile will
issue to SoftBank, for no additional consideration, a number of shares of
T-Mobile Common Stock equal to the SoftBank Specified Shares Amount, subject to
the terms and conditions set forth in the Letter Agreement.
In connection with the foregoing arrangements, the Amendment provides for
certain modifications to the percentage thresholds applicable to SoftBank's
ownership with respect to its director representation rights in the
Stockholders' Agreement (as defined in the Business Combination Agreement) to be
entered into in connection with the closing of the Merger Transactions (which
modifications will no longer apply in the event that T-Mobile is obligated to
issue the SoftBank Specified Shares Amount).
The foregoing description of the Amendment (including the modifications to the
form of the Stockholders' Agreement) and the Letter Agreement is not complete
and is qualified in its entirety by reference to the full text of the Amendment
and the Letter Agreement, copies of which are filed as Exhibit 2.1 and Exhibit
10.1, respectively, hereto and are incorporated herein by reference.
The completion of the Merger Transactions remains subject to certain closing
conditions pursuant to the Business Combination Agreement, as amended. T-Mobile
and Sprint currently anticipate that the Merger Transactions will close as early
as April 1, 2020.
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Item 8.01 Other Events.
On February 20, 2020, T-Mobile and Sprint issued a press release announcing the
entry into the Amendment and the Letter Agreement. A copy of the press release
is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
2.1 Amendment No. 2, dated as of February 20, 2020, to the Business
Combination Agreement, dated as of April 29, 2018, by and among
T-Mobile US, Inc., Huron Merger Sub LLC, Superior Merger Sub
Corporation, Sprint Corporation, Starburst I, Inc., Galaxy
Investment Holdings, Inc., and for the limited purposes set forth
therein, Deutsche Telekom AG, Deutsche Telekom Holding B.V., and
SoftBank Group Corp., as amended.*
10.1 Letter Agreement, dated as of February 20, 2020, by and among
T-Mobile US, Inc., Deutsche Telekom AG and SoftBank Group Corp.
99.1 Press Release dated February 20, 2020.
104 Cover Page Interactive Data File (the cover page XBRL tags are
embedded within the Inline XBRL document).
* This filing excludes certain schedules pursuant to Item 601(a)(5) of Regulation
S-K, which the registrant agrees to furnish supplementally to the Securities
and Exchange Commission upon request by the Commission.
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Important Additional Information
In connection with the proposed transaction, T-Mobile US, Inc. ("T-Mobile") has
filed a registration statement on Form S-4 (File No. 333-226435), which was
declared effective by the U.S. Securities and Exchange Commission (the "SEC") on
October 29, 2018, and which contains a joint consent solicitation statement of
T-Mobile and Sprint Corporation ("Sprint"), that also constitutes a prospectus
of T-Mobile (the "joint consent solicitation statement/prospectus"), and each
party will file other documents regarding the proposed transaction with the SEC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT CONSENT SOLICITATION
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The documents
filed by T-Mobile may be obtained free of charge at T-Mobile's website, at
www.t-mobile.com, or at the SEC's website, at www.sec.gov, or from T-Mobile by
requesting them by mail at T-Mobile US, Inc., Investor Relations, 1 Park Avenue,
14th Floor, New York, NY 10016, or by telephone at 212-358-3210. The documents
filed by Sprint may be obtained free of charge at Sprint's website, at
www.sprint.com, or at the SEC's website, at www.sec.gov, or from Sprint by
requesting them by mail at Sprint Corporation, Shareholder Relations, 6200
Sprint Parkway, Mailstop KSOPHF0302-3B679, Overland Park, Kansas 66251, or by
telephone at 913-794-1091.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S. Securities Act of
1933, as amended.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains certain forward-looking statements concerning
T-Mobile, Sprint and the proposed transaction between T-Mobile and Sprint. All
statements other than statements of fact, including information concerning
future results, are forward-looking statements. These forward-looking statements
are generally identified by the words "anticipate," "believe," "estimate,"
"expect," "intend," "may," "could" or similar expressions. Such forward-looking
statements include, but are not limited to, statements about the benefits of the
proposed transaction, including anticipated future financial and operating
results, synergies, accretion and growth rates, T-Mobile's, Sprint's and the
combined company's plans, objectives, expectations and intentions, and the
expected timing of completion of the proposed transaction. There are several
factors which could cause actual plans and results to differ materially from
those expressed or implied in forward-looking statements. Such factors include,
but are not limited to, the failure to obtain, or delays in obtaining, required
regulatory approvals, and the risk that such approvals may result in the
imposition of conditions that could adversely affect the combined company or the
expected benefits of the proposed transaction, or the failure to satisfy any of
the other conditions to the proposed transaction on a timely basis or at all;
the occurrence of events that may give rise to a right of one or both of the
parties to terminate the Business Combination Agreement; adverse effects on the
market price of T-Mobile's or Sprint's common stock and on T-Mobile's or
Sprint's operating results because of a failure to complete the proposed
transaction in the anticipated timeframe or at all; inability to obtain the
financing contemplated to be obtained in connection with the proposed
transaction on the expected terms or timing or at all; the ability of T-Mobile,
Sprint and the combined company to make payments on debt or to repay existing or
future indebtedness when due or to comply with the covenants contained therein;
adverse changes in the ratings of T-Mobile's or Sprint's debt securities or
adverse conditions in the credit markets; negative effects of the announcement,
pendency or consummation of the transaction on the market price of T-Mobile's or
Sprint's common stock and on T-Mobile's or Sprint's operating results, including
as a result of changes in key customer, supplier, employee or other business
relationships; significant transaction costs, including financing costs, and
unknown liabilities; failure to realize the expected benefits and synergies of
the proposed transaction in the expected timeframes or at all; costs or
difficulties related to the integration of Sprint's network and operations into
T-Mobile; the risk of litigation or regulatory actions, including the antitrust
litigation brought by the attorneys general of certain states and the District
of Columbia; the inability of T-Mobile, Sprint or the combined company to retain
and hire key personnel; the risk that certain contractual restrictions contained
in the Business Combination Agreement during the pendency of the proposed
transaction
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could adversely affect T-Mobile's or Sprint's ability to pursue business
opportunities or strategic transactions; effects of changes in the regulatory
environment in which T-Mobile and Sprint operate; changes in global, political,
economic, business, competitive and market conditions; changes in tax and other
laws and regulations; and other risks and uncertainties detailed in the Form
S-4, as well as in Sprint's Annual Report on Form 10-K for the fiscal year ended
March 31, 2019 and in its subsequent reports on Form 10-Q, including in the
sections thereof captioned "Risk Factors" and "MD&A - Forward-Looking
Statements," as well as in its subsequent reports on Form 8-K, all of which are
filed with the SEC and available at www.sec.gov and www.sprint.com.
Forward-looking statements are based on current expectations and assumptions,
which are subject to risks and uncertainties that may cause actual results to
differ materially from those expressed in or implied by such forward-looking
statements. Given these risks and uncertainties, persons reading this
communication are cautioned not to place undue reliance on such forward-looking
statements. Sprint assumes no obligation to update or revise the information
contained in this communication (whether as a result of new information, future
events or otherwise), except as required by applicable law.
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