determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to T-Mobile or Sprint or the contemplated transaction.
PJT Partners prepared these analyses for purposes of PJT Partners providing its opinion to the T-Mobile board of directors as to the fairness, as of the date of the opinion, of the exchange ratio pursuant to the business combination agreement to T-Mobile from a financial point of view. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of T-Mobile, Sprint, PJT Partners or any other person assumes responsibility if future results are materially different from those forecast.
PJT Partners is an internationally recognized investment banking firm and, as part of its investment banking activities, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. The T-Mobile board of directors selected PJT Partners because of its qualifications, reputation and experience in the valuation of businesses and securities in connection with mergers and acquisitions generally and in the U.S. wireless industry specifically.
PJT Partners is acting as financial advisor to T-Mobile with respect to the merger transactions. As compensation for its services in connection with the merger transactions, T-Mobile paid PJT Partners $3.0 million upon the delivery of PJT Partners’ opinion. Compensation of $20.0 million, less the amount of the opinion fee previously paid, will be payable by T-Mobile to PJT Partners upon the closing of the merger. In addition, at the sole discretion of T-Mobile, a discretionary fee of up to $10.0 million may be payable to PJT Partners upon the closing of the merger. Furthermore, T-Mobile has agreed to reimburse PJT Partners for out-of-pocket expenses and to indemnify PJT Partners for certain liabilities arising out of the performance of such services (including the rendering of its opinion).
In the ordinary course of its and its affiliates’ businesses, PJT Partners and its affiliates may provide investment banking and other financial services to T-Mobile, Sprint or their respective affiliates and may receive compensation for the rendering of these services. During the two years preceding the date of PJT Partners’ opinion, PJT Partners and certain of its affiliated entities were advising or have advised (1) the audit committee of T-Mobile in connection with certain financings by Deutsche Telekom, for which PJT Partners received customary compensation, (2) SoftBank in connection with an investment unrelated to the merger transactions, for which PJT Partners received customary compensation, (3) OneWeb, in which SoftBank owns a non-controlling equity stake, in connection with a potential transaction unrelated to the merger transactions, for which PJT Partners may in the future receive customary compensation, and (4) Ligado Networks LLC, in which Fortress Investment Group LLC, which has become a subsidiary of SoftBank subsequent to PJT Partners’ mandate, owns a significant investment, on matters unrelated to the merger transactions, for which PJT Partners may in the future receive customary compensation. For its financial advisory services to T-Mobile during the two years preceding the date of the PJT Partners’ opinion, PJT Partners has received compensation in an aggregate amount of $500,000. For its financial advisory services to SoftBank during the two years preceding the date of PJT Partners’ opinion, PJT Partners has received compensation in an aggregate amount of $5,000,000. PJT Partners may also in the future provide investment banking and other financial services to T-Mobile, Deutsche Telekom and SoftBank and their respective affiliates for which it may receive compensation.
At a meeting of the T-Mobile board of directors, Goldman Sachs rendered its oral opinion, subsequently confirmed in its written opinion dated April 29, 2018, that, as of the date of its written opinion and based upon
and subject to the factors and assumptions set forth in Goldman Sachs’ written opinion, the exchange ratio pursuant to the business combination agreement was fair from a financial point of view to T-Mobile.
The full text of the written opinion of Goldman Sachs, dated April 29, 2018, which sets forth assumptions made, procedures followed, matters considered, qualifications and limitations on the review undertaken in connection with the opinion, is attached to this joint consent solicitation statement/prospectus as Annex I and incorporated by reference herein. The summary of the Goldman Sachs opinion contained in this joint consent solicitation statement/prospectus is qualified in its entirety by reference to the full text of Goldman Sachs’ written opinion. Goldman Sachs’ advisory services provided to T-Mobile and opinion were provided for the information and assistance of the T-Mobile board of directors in connection with its consideration of the merger transactions and the opinion does not constitute a recommendation as to how any holder of T-Mobile common stock should vote with respect to the merger transactions or any other matter.
In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:
| • | the business combination agreement; |
| • | annual reports to stockholders and Annual Reports on Form 10-K of T-Mobile and Sprint for the five fiscal years ended December 31, 2017 and March 31, 2017, respectively; |
| • | certain interim reports to stockholders and Quarterly Reports on Form 10-Q of T-Mobile and Sprint; |
| • | certain other communications from T-Mobile and Sprint to their respective stockholders; |
| • | certain publicly available research analyst reports for T-Mobile and Sprint; |
| • | certain internal financial analyses and forecasts for Sprint prepared by its management (which we refer to as the Sprint management Sprint forecasts and which are summarized under “—Sprint Unaudited Prospective Financial Information”); and |
| • | certain internal financial analyses and forecasts for T-Mobile on a standalone basis (which we refer to as the T-Mobile management T-Mobile forecasts), and for the combined company on a pro forma basis giving effect to the completion of the merger transactions (which we refer to as the combined company forecasts), and certain financial analyses and forecasts for Sprint (which we refer to as the T-Mobile management Sprint forecasts), in each case, as prepared by the management of T-Mobile and approved for Goldman Sachs’ use by T-Mobile (which we refer to in this section entitled “—Opinion of Goldman Sachs,” collectively, as the “T-Mobile forecasts”) and which are summarized under “—T-Mobile Unaudited Prospective Financial Information” and “—Sprint Unaudited Prospective Financial Information,” and certain operating synergies projected by the management of T-Mobile based in part on inputs from and discussions with Sprint management to result from the merger (which we refer to as the estimated synergies), as approved for Goldman Sachs’ use by T-Mobile. |
Goldman Sachs also held discussions with members of the senior managements of T-Mobile and Sprint regarding their assessment of the past and current business operations, financial condition and future prospects of Sprint and with the members of senior management of T-Mobile regarding their assessment of the past and current business operations, financial condition and future prospects of T-Mobile and the strategic rationale for, and the potential benefits of, the merger transactions; reviewed the reported price and trading activity for the shares of T-Mobile common stock and the shares of Sprint common stock; compared certain financial and stock market information for T-Mobile and Sprint with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the telecommunications industry and in other industries; and performed such other studies and analyses, and considered such other factors, as Goldman Sachs deemed appropriate.
For purposes of rendering its opinion, Goldman Sachs, with the consent of the T-Mobile board of directors, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting
