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SoftBank Group Q2 profit rises 21%, Son says merger doors with Sprint open

Sprint and T-Mobile said they had called off merger talks, denting the dealmaking credentials of Masayoshi Son

Reuters 

SoftBank Group Corp Chairman and CEO Masayoshi Son attends a news conference in Tokyo, Japan. Photo: Reuters
SoftBank Group Corp Chairman and CEO Masayoshi Son attends a news conference in Tokyo, Japan. Photo: Reuters

Sprint Corp can grow on its own but will still consider a merger if it can get management control, CEO of the US wireless operator's parent Corp said, days after a move to combine with ended. Sprint and T-Mobile said on Saturday they had called off merger talks, denting the dealmaking credentials of Son, who has raised close to $100 billion for his Vision Fund to invest in technology It also puts Son under pressure to find another way to turn around the carrier, the No. 4 US provider which is weighed down with $38 billion in debt and is struggling to compete with and AT&T Inc. “I feel good about this decision,” Son said of the decision to call off merger talks. "Even if it is tough for the next three or four years, on a five or ten year timescale scale it is a strategically indispensable company," he told reporters at SoftBank's earnings briefing on Monday. However, when asked about the failed T-Mobile merger, Son said that "the door is open" if its management rights are preserved. SoftBank said on Sunday it would raise its stake in Sprint to under 85 per cent from 83 per cent, the most it can hold without triggering a tender offer for the remaining shares. "US telecoms is indispensable infrastructure and as an investing company SoftBank should have the ability to control such infrastructure," Son said. The Japanese tech and telecoms firm is funnelling money to US firms as it invests in technology around the world, including through its Vision Fund, as founder Son pursues his vision of a future driven by artificial intelligence, interconnected devices and robotics. The company is finalising conditions for investment in Uber Technologies Inc that must be met, Son said, including pricing and negotiations with existing investors. "I believe that Uber is a good company," Son said, adding that "whether we make an investment in Uber or not is not decided". SoftBank, along with other investors, is expected to purchase as much as $10 billion in Uber shares, most of them from employees and existing investors in a so-called secondary offering. SoftBank reported on Monday a 21 per cent rise in second-quarter operating profit as the value of its technology investments grew. Profit for the July-September quarter rose to 395.6 billion yen ($3.46 billion) from 328.1 billion yen a year earlier.

Excluding profit from the Vision Fund, income would have fallen 4 per cent. SoftBank shares closed down 2.6 per cent in Tokyo on Monday. The benchmark Nikkei 225 index closed flat.

First Published: Mon, November 06 2017. 15:15 IST
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