SoftBank’s stock soars after securing $7.6 billion stake in T-Mobile By Reuters

© Reuters. FILE PHOTO: The SoftBank Group Corporation logo is displayed at the SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato/File Photo

Sam Nussey

TOKYO (Reuters) – SoftBank Group Corp said it will acquire about $7.59 billion worth of shares in telecommunications company T-Mobile US (NASDAQ:) at no additional cost, sending shares of the Japanese conglomerate up 5%.

Masayoshi Son’s conglomerate said late Tuesday that it had instructed T-Mobile US to issue 48.75 million shares of its common stock under terms set out in an agreement reached as part of Softbank’s (TYO:) merger of U.S. telecoms Sprint and T. – Mobile meets.

The deal follows chip designer Arm’s blockbuster listing last September and doubles its stake in T-Mobile US to 7.64% from its current 3.75%, strengthening the listed assets in SoftBank’s portfolio.

“This increases the proportion of listed and measurable equity on (SoftBank Group’s) balance sheet and, by extension, the ratio of marginal equity to debt,” Macquarie analyst Paul Golding wrote in a client note.

SoftBank’s stock price saw its biggest gain in more than a month. Large companies are up only about 14% so far this year, compared with a nearly 30% rise for the benchmark index. According to Macquarie calculations, the group is trading at a discount of approximately 45.5% to its asset value.

Chairman Son was a major investor in late-stage startups, but suffered a series of adversities, including the bankruptcy of WeWork, an office-sharing company that was once the most valuable among American startups.

The T-Mobile U.S. deal raises the internal rate of return (IRR) for SoftBank’s investment in Sprint to 25.5%.

Other positives for the company include the rise in Arm’s stock price, which closed Tuesday about 44% above its initial public offering price.