Japan's Softbank has been increasing its stake in US wireless operator Sprint, spending $86.9 million to acquire an additional 22.9 million shares.
The purchase represents an indication that Softbank CEO Masayoshi Son has renewed confidence in Sprint's ability to turn around its loss-making operations.
The new purchases at an average weighted price of $3.80 per share have increased Softbank's stake in Sprint to just shy of 80%.
In a statement, the company said it does not intend to increase its ownership in Sprint past the 85% threshold, which would trigger a compulsory tender offer for the remaining shares. Avoiding the threshold was a condition of the initial purchase of a 78% stake.
“The company has dedicated significant resources to optimizing Sprint's network strategy and is supporting the development of innovative lease financing structures,” the statement reads.
“In light of these and other turnaround initiatives, the company is confident in Sprint's future prospects, and therefore decided to carry out the additional purchases.”
The Wall Street Journalreports that following the setback Son sought a buyer and considered writing off the investment, but reconsidered after drawing up a plan to overhaul the Sprint network at a low cost.
Sprint has also been showing signs of recovering, although the operator is still losing money and its share price is still significantly below the post-acquisition high.