2017 (which was subsequently terminated in February 2018); as joint bookrunner on offerings of debt securities by T-Mobile in November 2015, March 2016, March 2017 and January 2018; as joint lead arranger and joint bookrunner on SoftBank’s credit facility in November 2017; as joint bookrunner on offerings of debt securities by Deutsche Telekom in April and September 2016 and as a co-advisor to Deutsche Telekom on a joint venture involving one of its affiliates. In addition, J.P. Morgan’s commercial banking affiliate is an agent bank and a lender under outstanding credit facilities of Sprint, for which it receives customary compensation or other financial benefits. During the two years preceding the date of J.P. Morgan’s opinion, J.P. Morgan and its affiliates have received aggregate fees of approximately $60 million from Sprint and $600,000 from T-Mobile. On each of May 7 and May 14, 2018, J.P. Morgan was separately engaged by Sprint and/or certain affiliates of Sprint pursuant to separate solicitation agent agreements to act as lead solicitation agent in connection with the solicitation from holders of certain notes issued by Sprint and such affiliates of certain consents in connection with the merger transactions, including as described in the section of this joint consent solicitation statement/prospectus entitled “The Business Combination Agreement—Covenants and Agreements—Financing Matters,” which agreements provided for solicitation fees payable to J.P. Morgan upon completion of the solicitations of up to $26 million. These solicitations have been completed. In addition, J.P. Morgan and its affiliates hold, on a proprietary basis, less than 1% of the outstanding common stock of each of Sprint, T-Mobile, SoftBank and Deutsche Telekom. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of Sprint, T-Mobile, SoftBank or Deutsche Telekom for their own accounts or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities or other financial instruments.
Opinion of Centerview to the Sprint Independent Committee
On April 29, 2018, Centerview rendered to the Sprint independent committee its oral opinion, subsequently confirmed in a written opinion dated such date, that, as of such date and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the exchange ratio provided for pursuant to the business combination agreement was fair, from a financial point of view, to the holders of Sprint common stock (other than holders of excluded shares).
The full text of Centerview’s written opinion, dated April 29, 2018, which describes the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, is attached as Annex M to this joint consent solicitation statement/prospectus and is incorporated herein by reference. The summary of the written opinion of Centerview set forth below is qualified in its entirety by the full text of Centerview’s written opinion attached as Annex M to this joint consent solicitation statement/prospectus. Centerview’s financial advisory services and opinion were provided for the information and assistance of the Sprint independent committee (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the merger transactions and Centerview’s opinion only addressed the fairness, from a financial point of view, as of the date thereof, to the holders of Sprint common stock (other than holders of excluded shares) of the exchange ratio provided for pursuant to the business combination agreement. Centerview’s opinion did not address any other term or aspect of the business combination agreement or the merger transactions and does not constitute a recommendation to any stockholder of Sprint or any other person as to how such stockholder or other person should vote with respect to the merger or otherwise act with respect to the merger transactions or any other matter.
The full text of Centerview’s written opinion should be read carefully in its entirety for a description of the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion.
In connection with rendering the opinion described above and performing its related financial analyses, Centerview reviewed, among other things:
| • | a draft of the business combination agreement dated April 29, 2018 (which we refer to in this section entitled “—Opinion of Centerview to the Sprint Independent Committee” as the “draft business combination agreement”); |
| • | Annual Reports on Form 10-K of Sprint for the years ended March 31, 2017, March 31, 2016 and March 31, 2015 and Annual Reports on Form 10-K of T-Mobile for the years ended December 31, 2017, December 31, 2016 and December 31, 2015; |
| • | certain interim reports to stockholders and Quarterly Reports on Form 10-Q of Sprint and T-Mobile; |
| • | certain publicly available research analyst reports for Sprint and T-Mobile; |
| • | certain other communications from Sprint and T-Mobile to their respective stockholders; |
| • | certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of Sprint, including the Sprint management Sprint forecasts and the adjusted Sprint management Sprint forecasts prepared by management of Sprint and furnished to Centerview by Sprint for purposes of Centerview’s analysis (which we refer to, collectively, in this section entitled “—Opinion of Centerview to the Sprint Independent Committee” as the “Sprint forecasts” and which are summarized under “—Sprint Unaudited Prospective Financial Information”); |
| • | certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of T-Mobile, including the T-Mobile management T-Mobile forecasts prepared by management of T-Mobile and furnished to Centerview by Sprint for purposes of Centerview’s analysis (which we refer to in this section entitled “—Opinion of Centerview to the Sprint Independent Committee” as the “T-Mobile forecasts” and which are summarized under “—T-Mobile Unaudited Prospective Financial Information”); and |
| • | certain pro forma forecasts, including tax and other cost savings and operating synergies projected by the management of Sprint and T-Mobile to result from the merger transactions furnished to Centerview by Sprint for the purposes of Centerview’s analysis (which are summarized under “—T-Mobile Unaudited Prospective Financial Information”). |
Centerview also participated in discussions with members of the senior management and representatives of Sprint and T-Mobile regarding their assessment of the Sprint forecasts, the T-Mobile forecasts and the estimated synergies, as appropriate, and the strategic rationale for the merger transactions. In addition, Centerview reviewed publicly available financial and stock market data, including valuation multiples, for Sprint and T-Mobile and compared that data with similar data for certain other companies, the securities of which are publicly traded, in lines of business that Centerview deemed relevant. Centerview also compared certain of the proposed financial terms of the merger transactions with the financial terms, to the extent publicly available, of certain other transactions that Centerview deemed relevant, and conducted such other financial studies and analyses and took into account such other information as Centerview deemed appropriate.
Centerview assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by Centerview for purposes of its opinion and, with the Sprint independent committee’s consent, Centerview relied upon such information as being complete and accurate. In that regard, Centerview assumed, at the Sprint independent committee’s direction, that the Sprint forecasts (including, without limitation, the Sprint management Sprint forecasts and the adjusted Sprint management Sprint forecasts) and the estimated synergies were reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of Sprint as to the matters covered thereby and, that the T-Mobile forecasts (including, without limitation, the T-Mobile management T-Mobile forecasts) and the estimated synergies have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of T-Mobile
as to the matters covered thereby, and Centerview relied, at the Sprint independent committee’s direction, on the Sprint forecasts, the T-Mobile forecasts and the estimated synergies for purposes of Centerview’s analysis and opinion. Centerview expressed no view or opinion as to the Sprint forecasts, the T-Mobile forecasts, the estimated synergies or the assumptions on which they were based. In addition, at the Sprint independent committee’s direction, Centerview did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of Sprint or T-Mobile, nor was Centerview furnished with any such evaluation or appraisal, and Centerview was not asked to conduct, and did not conduct, a physical inspection of the properties or assets of Sprint or T-Mobile. Centerview assumed, at the Sprint independent committee’s direction, that the final executed business combination agreement would not differ in any respect material to Centerview’s analysis or opinion from the draft business combination agreement reviewed by Centerview. Centerview also assumed, at the Sprint independent committee’s direction, that the merger transactions will be completed on the terms set forth in the business combination agreement and in accordance with all applicable laws and other relevant documents or requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to Centerview’s analysis or Centerview’s opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the merger transactions, no delay, limitation, restriction, condition or other change, including any divestiture requirements or amendments or modifications, will be imposed, the effect of which would be material to Centerview’s analysis or Centerview’s opinion. Centerview further assumed, at the Sprint independent committee’s direction, that the merger will qualify for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code. Centerview did not evaluate and did not express any opinion as to the solvency or fair value of Sprint, T-Mobile, the Deutsche Telekom Parties, the SoftBank Parties or any other person, or the ability of Sprint, T-Mobile, the Deutsche Telekom Parties, the SoftBank Parties or any other person to pay their respective obligations when they come due, or as to the impact of the merger transactions on such matters, under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Centerview is not a legal, regulatory, tax or accounting advisor, and Centerview expressed no opinion as to any legal, regulatory, tax or accounting matters.
Centerview’s opinion expressed no view as to, and did not address, Sprint’s underlying business decision to proceed with or effect the merger transactions, or the relative merits of the merger transactions as compared to any alternative business strategies or transactions that might be available to Sprint or in which Sprint might engage. Centerview’s opinion was limited to and addressed only the fairness, from a financial point of view, as of the date of Centerview’s written opinion, to the holders of Sprint common stock (other than holders of excluded shares) of the exchange ratio pursuant to the business combination agreement. For purposes of its opinion, Centerview was not asked to, and Centerview did not, express any view on, and its opinion did not address, any other term or aspect of the business combination agreement or the merger transactions, including, without limitation, the structure or form of the merger transactions, or any other agreements or arrangements contemplated by the business combination agreement or entered into in connection with or otherwise contemplated by the merger transactions, including, without limitation, the fairness of the merger transactions or any other term or aspect of the merger transactions to, or any consideration to be received in connection therewith by, or the impact of the merger transactions on, the SoftBank Parties, the holders of any other class of securities, creditors or other constituencies of Sprint or any other party. In addition, Centerview expressed no view or opinion as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of Sprint or any party, or class of such persons in connection with the merger transactions, whether relative to the exchange ratio provided for pursuant to the business combination agreement or otherwise. Centerview’s opinion relates to the relative values of Sprint and T-Mobile. Centerview’s opinion was necessarily based on financial, economic, monetary, currency, market and other conditions and circumstances as in effect on, and the information made available to Centerview as of, the date of Centerview’s written opinion, and Centerview does not have any obligation or responsibility to update, revise or reaffirm its opinion based on circumstances, developments or events occurring after the date of Centerview’s written opinion. Centerview’s opinion expressed no view as to, and did not address, what the value of T-Mobile common stock actually will be when issued pursuant to the merger transactions or the prices at which Sprint common stock or T-Mobile common stock will trade or otherwise be transferable at any time,
