Softbank rumored to consider Vodafone bid

Dylan Bushell-Embling

Softbank is considering making a major acquisition in Europe if it fails to convince US lawmakers to allow it to merge its US subsidiary Sprint Nextel with T-Mobile USA, according to reports.

Forbes has reported, citing an unnamed telecom executive, that Softbank is evaluating acquiring Vodafone following the planned IPO of Chinese internet giant Alibaba.

Softbank's 37% stake in Alibaba is expected to be worth at least $150 billion after the debut.

But the rumor should be taken with a grain of salt, as even with the Alibaba IPO, Softbank's pockets may not be deep enough for such a large acquisition.

A banker interviewed for the Forbes story estimates that Vodafone may want some $160 billion for a takeover, and would want cash rather than stock.

The banker noted that if Softbank wants to pursue a European acquisition, Deutsche Telekom could be a more likely target, not least because the German operator owns T-Mobile USA.

Softbank paid $21.6 billion for a 78% stake in US wireless operator Sprint Nextel last year. The company has since set its sights on a merger between Sprint and T-Mobile USA, arguing that this is the only way Sprint will be able to effectively compete with incumbents AT&T and Verizon.

But FCC chairman Tom Wheeler has expressed skepticism over whether the proposed merger will be beneficial for consumers.
 

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