Son’s SoftBank May See an Upside in Trump’s Surprise Victory

Updated on
  • Sprint’s shares jump on renewed merger prospects in the U.S.
  • Son’s plan to buy T-Mobile was blocked by regulators

Trump Win May Benefit SoftBank

Investors are betting that Donald Trump’s surprise U.S. presidential victory may benefit SoftBank Group Corp.’s struggle to turn around Sprint Corp.

Masayoshi Son’s mobile phone ambitions in the U.S. were derailed when regulators blocked his plan to combine No. 4 Sprint, controlled by SoftBank, with No. 3 T-Mobile US Inc. Investors are now betting the new administration will usher a less restrictive merger environment. SoftBank rose the most in three months in Tokyo.

“Under the current leadership the merger idea was killed,” said Kevin Roe, an analyst with Roe Equity Research. “Investors are now seeing the deal go from zero probability to some probability under Trump. But it’s still unlikely given Trump’s populist stance.”

SoftBank rose 6.9 percent to 6,439 yen as of 9:14 a.m. in Tokyo. Sprint, based in Overland Park, Kansas, closed 13 percent higher at $7.11 in New York, the most in three months. T-Mobile gained 5.1 percent to $53.01.

Son, one of the world’s wealthiest men, still harbors a desire to merge the two wireless providers, according to people familiar with his thinking in August. SoftBank owns more than 80 percent of Sprint after acquiring a majority stake in 2013. Sprint is part of Son’s famed plan to build a business empire that can endure for three centuries.

Still, approval of a Sprint-T-Mobile merger wouldn’t be easy, Roe said. With four major wireless carriers competition has been aggressive and prices have been cut. That is something that may not have happened in a three-player field, he said.

“The deal would be pro-business, but not particularly pro-consumer,” Roe said.

Son declined to comment on possible changing in regulatory climate at an earnings briefing two days before the election results were announced.

“Sprint is a consumer business facing business in the U.S.,” he said. “Election results should have no direct impact.”

(Updates shares in second paragraph.)
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