Softbank seeking loans to buy Sprint

TOKYO, JAPAN: Japanese wireless service provider Softbank Corp is in talks with three major Japanese banks to borrow $23 billion (1.8 trillion yen) to finance a bid for U.S. operator Sprint Nextel Corp, sources with direct knowledge of the matter told Reuters on Friday.

The proposed syndicate includes Mizuho Financial Group Inc, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group, the sources said.

Acquiring Sprint Nextel would make Softbank a major player in the U.S. mobile market and represent one of the biggest overseas acquisitions by a Japanese corporation.

But how Softbank would finance a potential deal remains a concern for investors.

Softbank and Sprint confirmed they are holding talks. While Sprint shares rose more than 14 percent, investors dumped Softbank shares in Tokyo on Friday, pushing the stock down as much as 17 percent to its lowest in nearly five months.

In addition to Sprint's market value of just over $15 billion, the carrier has net debt of another $14.8 billion.

Softbank's ambitions may also not stop with Sprint, which might be looking to buy out its partner, wireless service provider Clearwire Corp.

The Japanese company might use Sprint as a vehicle to acquire smaller U.S. mobile provider MetroPCS Communications Inc, a two-step transaction that would potentially cost more than 2 trillion yen ($25.55 billion), the Nikkei newspaper reported earlier on Friday.

That would make the deal the biggest overseas acquisition by a Japanese firm and vault Softbank into the upper echelons of wireless carriers worldwide.