SoftBank to sell US cellphone distributor Brightstar in latest asset sale

Brightstar could be valued at more than $1bn

SoftBank chief executive Masayoshi Son has been selling core assets to stabilise its balance sheet. AFP

SoftBank Group said on Friday it would sell US mobile phone distributor Brightstar Global Group for an undisclosed price, marking the latest asset sale by the Japanese conglomerate to fund a record stock buyback and raise cash.

SoftBank said in a statement it would sell the firm to a newly formed subsidiary of private equity firm Brightstar Capital Partners for cash as well as a 25 per cent stake in the subsidiary.

Brightstar Capital is not an affiliate of Brightstar Global, the statement said.

The move comes after an announcement in late August that it was cutting its stake in wireless unit, followed by news this week it was selling chip designer Arm to Nvidia.

SoftBank was exploring a Brightstar sale to shed lower-growth businesses in 2018, people familiar with the matter said at that time. Brightstar could be valued at more than $1 billion (Dh3.67bn), the people said.

SoftBank chief executive Masayoshi Son has been selling core assets to stabilise its balance sheet and pay for its repurchase programme to bolster its shares.

Even so, SoftBank executives, frustrated at the group's share performance, have held early stage talks about taking the Japanese technology group private, a source said.

The transaction, subject to regulatory approvals and other customary closing conditions, is expected to close by March 31, next year, SoftBank said.

With all the money coming in, Mr Son unveiled a new asset management arm that would invest in public securities. SoftBank has disclosed about $3.9bn of investments into 25 of the world’s largest technology companies including Amazon, Tesla, Netflix and Alphabet. It did not disclose details of its derivative stakes.

SoftBank said it was expanding its cash reserves beyond the asset sales already announced “to ensure flexible options to respond to changes in the market environment”.

The company cited “the ongoing uncertainty in the market environment due to concerns about a potential second or even third wave of Covid-19”.

*with inputs from Bloomberg