Morrison & Foerster Tokyo office head Kenneth Siegel, 54, and San Francisco–based M&A head Robert Townsend, 56.


Tokyo-based Internet and telecommunications group SoftBank.


SoftBank's acquisition of a majority stake in Overland Park, Kansas–based Sprint Nextel. Originally announced in October, the transaction was approved by Sprint shareholders Tuesday following a months-long battle with rival bidder DISH Network.


The deal's terms call for SoftBank to pay $21.6 billion in exchange for a 78 percent stake in Sprint. Softbank sweetened its original $20.1 billion offer earlier this month in response to a competing bid put forward by Englewood, Colorado–based DISH in April. The SoftBank offer is made up of a $16.6 billion cash payment to Sprint shareholders and a $5 billion direct investment in the U.S. telecom's operating budget. (Softbank put $3.1 billion of that sum into the target company in October.)

With roughly 98 percent of Sprint's shareholders approving the deal earlier this week, the last significant obstacle for SoftBank to clear involves obtaining Federal Communications Commission approval. (The deal has already received all other necessary regulatory approvals.) Reuters reports that FCC approval could come as soon as Friday, and that agency chairwoman Mignon Clyburn has already indicated her support for the transaction.

Once SoftBank finalizes its acquisition of the Sprint stake, the two companies will move quickly to close on Sprint's related acquisition of the 49 percent stake in cellular network Clearwire Corp. that Sprint does not already own. Using part of Softbank's original cash injection, Sprint agreed to pay $2.1 billion for that stake in December in order to bolster its high-speed data network with Clearwire's valuable wireless spectrum. Though SoftBank originally required Sprint to cap its Clearwire bid at $2.97 per share, Sprint was forced to increase its offer after DISH made its own $3.30-per-share bid for a stake in the Bellevue, Washington–based company in January.

The two companies jockeyed over Clearwire during the ensuing months, and Sprint eventually triumphed with a $5-per-share bid that topped DISH's final offer of $4.40 per share. DISH chairman Charles Ergen conceded earlier this week that he had fallen short in his attempts to buy Clearwire and Sprint.

Reuters adds that the FCC is not expected to demand any divestitures when it rules on Sprint's Clearwire purchase, which the regulator is reviewing simultaneously with the SoftBank deal. Clearwire's minority shareholders are set to vote on the stake sale to Sprint on July 8.


The skirmish for control of Sprint and Clearwire kicked off in earnest after the FCC issued an influential decision in December that allowed DISH to convert broadband spectrum previously used for satellite telephone transmissions into spectrum used for more consumer-friendly cellphone service. The Am Law Daily reported at the time that the decision—which came the same week that Sprint's initial agreement with Clearwire was announced—could lead to a competitive shake-up in the wireless industry given that DISH's Ergen had long been poised to capitalize on stockpiled satellite spectrum by adding wireless service to his company's television and Internet services.

And though it didn't take Ergen long to make an aggressive play for both Clearwire and Sprint, DISH's failure to outmaneuver SoftBank means that it must now devise another strategy for entering the wireless market. (In related news, the FCC announced Friday it will auction off a 10 MHz block of wireless spectrum that both Sprint and DISH may end up bidding on, according to PC Magazine.)

Meanwhile, this M&A victory is fully in line with SoftBank CEO Masayoshi Son's business strategy. The Japanese billionaire has made no secret of his ambitions, saying last week that he plans to use the Sprint acquisition as a springboard to vault his company into position as one of the world's biggest mobile carriers and largest companies. In addition to being Softbank's largest acquisition to date, the purchase of the majority Sprint stake is also the largest-ever overseas acquisition by a Japanese company.

Bloomberg reports that Son told shareholders last week that acquiring control of Sprint—which is currently ranked third among mobile carriers in the U.S. behind Verizon Wireless and AT&T—would help SoftBank reach a greater number of consumers. He added that the related Clearwire deal offers access to wireless spectrum the company needs to implement a fourth-generation mobile network.

With roughly 42 million subscribers, SoftBank is currently Japan's third-largest wireless company. It is also the country's fastest-growing company, having increased its stock price while also making a host of acquisitions in recent years, according to Bloomberg. Until last year, SoftBank was also the only Japanese carrier to sell the iPhone, as part of an agreement with Apple.


Siegel has led MoFo's Tokyo office since 1997 and has a close relationship with SoftBank that dates back to the 1990s, according to Townsend, who preceded his colleague as Tokyo office head. "[Siegel] and I have been working together for decades, literally, and when this deal came up, he asked me to step in and help run it on the U.S. side," Townsend says.

Siegel has a long history of technology-related M&A work in Japan. His past work for SoftBank includes advising the company on last year's $2.3 billion purchase of rival company eAccess. He has also worked with the company on a variety of joint ventures, as well as Yahoo's $1 billion investment in SoftBank's China affiliates, and Tao Bao, in 2005.

Townsend says this was the first major M&A transaction he'd worked on for SoftBank, though he began working worked with the client in "the early 2000s" in connection with its San Francisco Bay area–based venture group. He notes that, in addition to SoftBank's telecommunications interests, the company has a large investment arm that has been an active U.S. investor over the past decade.


After SoftBank and Sprint reached their initial agreement last October, Townsend says his team thought the deal might close ahead of schedule. Within a couple of months, he says, the dealmakers were encountering obstacles that "came in waves."

Less than a month after Sprint announced its agreement with Clearwire, DISH chairman Ergen— a somewhat controversial figure who once had a career as a professional blackjack and poker player—stepped in with a bid that valued Clearwire at about $5 billion. Townsend calls DISH's bid "a very bizarre investment as a minority holder into Clearwire," adding that DISH was seeking a minimum 25 percent stake in the company but was also asking for a number of governance provisions not normally afforded to minority owners, including seats on the Clearwire board. DISH was also hoping to separately acquire a portion of Clearwire's spectrum.

When DISH announced its bid, some market analysts questioned whether the company was actually interested in Clearwire or angling for a partnership with Sprint, according to Bloomberg. Townsend says SoftBank CEO Son publicly wondered the same thing, but his team was not overly concerned that DISH might have an interest in Sprint at that point: "We, of course, did contemplate other topping bids coming in, but it was a variety of players, and DISH would not have been at the top of that list."

As the process dragged on, Townsend was handling the U.S. side of deal matters, while Siegel continued to work closely with SoftBank executives in Japan, coordinated with the rest of the MoFo team, and maintained direct involvement on regulatory matters. Townsend says MoFo spent the month of January analyzing DISH's proposal before coming to the conclusion that it was "nonactionable," an idea he says was supported by a special committee of the board of Clearwire.

"We thought that DISH would then quickly turn around and modify its proposal to do something that was actionable, but in fact it didn't," Townsend says. The MoFo team continued to move forward working to obtain the necessary regulatory approvals to close both the Sprint deal with Clearwire and SoftBank's agreement with Sprint.

Townsend says the MoFo team still felt things were moving ahead of schedule at the beginning of the year: "We were worried we were going to get this done more quickly than we'd expected. We were worried that things were going to happen so that we'd be doing a closing in June and, lo and behold, Charlie made his announcement April 15 and changed all of our lives for a while."

It was "all hands on deck" after DISH announced its interest in Sprint in mid-April, says Townsend. He and Siegel were in meetings in Singapore when the news hit, and both immediately flew back to their respective bases, where they pulled together MoFo's global team in order to analyze the DISH offer. "[DISH] did a press release, didn't have a marked-up agreement, didn't have a financing commitment at the time, so they put a marker down and then went about executing at a more leisurely pace than one would normally anticipate," Townsend says. "But we recognized that that was also providing ammunition to shareholders who would, of course, love nothing more than for SoftBank to pay a higher price."

Immediately after DISH made its announcement, Sprint shareholders Paulson & Co. and Omega Advisors came out in support of the competing offer. At that point, Townsend says, MoFo and SoftBank realized it was critical to do a better job selling their deal to Sprint's shareholders. CEO Son began meeting with Sprint investors and shareholders, promoting his own vision for Softbank and the ways in which he believes the two companies complement each other.

SoftBank and Sprint amended their original agreement earlier this month, negotiating a new purchase price and termination fee while also giving SoftBank matching rights should DISH respond with an improved offer. DISH announced on June 21 that it was bowing out of the Sprint bidding.

As far as Clearwire was concerned, Sprint's latest bid required the approval of a majority of the minority shareholders that had been divided between backing Sprint and supporting the DISH bid. Claiming DISH's tender offer violated corporate law, Sprint moved to gain the upper hand by suing both DISH and Clearwire in Delaware Chancery Court. (Sprint cited Clearwire's charter and equity holders agreement in claiming that DISH's offer would require the approval of 75 percent of Clearwire's shareholders, Sprint included.) Townsend notes—and The Wall Street Journal reports—that at a hearing last week, Delaware Chancellor Leo Strine stopped short of ruling on the legality of DISH's proposal, but suggested that the company could be in for a tough time if the matter were to go to trial in September as scheduled.

Not long after that hearing, the Clearwire board announced that its shareholders had signed a new voting agreement backing Sprint, provided that Sprint raise its offer to $5 per share. On June 26, less than a week after dropping its pursuit of Sprint and a day after Sprint shareholders approved the deal with Softbank—DISH withdrew its bid for Clearwire.

After more than eight months, with the "immensely complex and fascinating" process now nearly complete, Townsend says these deal negotiations have been unlike any he's ever been involved with before. He believes the other lawyers and law firms working on the matter can probably say the same. (On the SoftBank side of the deal, MoFo worked with Japanese firm Mori Hamada & Matsumoto as local counsel, Dow Lohnes as regulatory counsel, Potter Anderson Corroon as Delaware counsel, and Foulston & Siefkin as Kansas counsel.)

"You've seen references in the press to this being the most complicated deal in decades, and it certainly felt like it at the time," he says.