Filed by Starburst II, Inc. Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Sprint Nextel Corporation
Commission File No.: 001-04721
SoftBank
Transaction with Sprint
April 30, 2013
SoftBank Corp.
Cautionary Statement Regarding Forward Looking Statements
This document includes “forward-looking statements” within the meaning of the securities laws. The words “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan,” “providing guidance” and similar expressions are intended to identify information that is not historical in nature.
This document contains forward-looking statements relating to the proposed transactions between Sprint Nextel Corporation (“Sprint”) and SoftBank Corp. (“SoftBank”) and its group companies, including Starburst II, Inc. (“Starburst II”), and the proposed acquisition by Sprint of Clearwire Corporation (“Clearwire”). All statements, other than historical facts, including, but not limited to: statements regarding the expected timing of the closing of the transactions; the ability of the parties to complete the transactions considering the various closing conditions; the expected benefits of the transactions such as improved operations, enhanced revenues and cash flow, growth potential, market profile and financial strength; the competitive ability and position of SoftBank or Sprint; and any assumptions underlying any of the foregoing, are forward-looking statements. Such statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. You should not place undue reliance on such statements. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, that (1) there may be a material adverse change of SoftBank; (2) the proposed financing may involve unexpected costs, liabilities or delays or may not be completed on terms acceptable to SoftBank, if at all; and (3) other factors as detailed from time to time in Sprint’s, Starburst II’s and Clearwire’s filings with the Securities and Exchange Commission (“SEC”), including Sprint’s and Clearwire’s Annual Reports on Form 10-K for the year ended December 31, 2012, and other factors that will be set forth in the proxy statement/prospectus contained in Starburst II’s Registration Statement on Form S-4, as amended, and in other materials that will be filed by Sprint, Starburst II and Clearwire in connection with the transactions, which will be available on the SEC’s web site (www.sec.gov). There can be no assurance that the transactions will be completed, or if completed, that such transactions will close within the anticipated time period or that the expected benefits of such transactions will be realized.
All forward-looking statements contained in this document and the documents referenced herein are made only as of the date of the document in which they are contained, and none of Sprint, SoftBank or Starburst II undertakes any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
Additional Information and Where to Find It
In connection with the proposed transaction between Sprint and SoftBank, Starburst II has filed with the SEC preliminary drafts of a Registration Statement on Form S-4 which includes a proxy statement of Sprint, and that also will constitute a prospectus of Starburst II. Following the SEC’s declaring the Registration Statement effective, Sprint will mail the proxy statement/prospectus to its stockholders. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. The proxy statement/ prospectus, as well as other filings containing information about Sprint, SoftBank and Starburst II, will be available, free of charge, from the SEC’s web site (www.sec.gov). Sprint’s SEC filings in connection with the transaction also will be available, free of charge, from Sprint’s web site (www.sprint.com) under the tab “About Us—Investors” and then under the heading “Documents and Filings—SEC Filings,” or by directing a request to Sprint, 6200 Sprint Parkway, Overland Park, Kansas 66251, Attention: Shareholder Relations or (913) 794-1091. Starburst II’s SEC filings in connection with the transaction will also be available, free of charge, by directing a request to SoftBank, 1-9-1 Higashi-Shimbashi, Minato-ku, Tokyo 105-7303, Japan; telephone: +81.3.6889.2290; e-mail: ir@softbank.co.jp.
Participants in the Merger Solicitation
The respective directors, executive officers and employees of Sprint, SoftBank, Starburst II and other persons may be deemed to be participants in the solicitation of proxies in respect of the transaction. Information regarding Sprint’s directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2012. Other information regarding the interests of such individuals as well as information regarding Starburst II’s directors and executive officers and prospective directors and executive officers will be available in the proxy statement/prospectus. These documents will be available free of charge from the sources indicated above. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
SoftBank Delivers
Superior Value
to Sprint Shareholders
2
DISH Proposal is Incomplete and Illusory
SoftBank
$ 6.22
Transaction Value per DISH Presentation
dish
$ 7.00
Proposal Value per DISH Presentation
*Created by SoftBank based on respective company’s publicly available information.
3
SoftBank Transaction Provides 21% Premium
SoftBank dish
$ 7.65
+21%
$ 6.31
SoftBank Transaction Value
DISH Proposal Value
*Created by SoftBank based on respective company’s publicly available information.
4
SoftBank Transaction is Superior
SoftBank dish
$ 7.65 (+21%) Value $6.31
July 2013 Timing Mid 2014
3.0x Leverage 5.9x
Straightforward Structure Separate Silos (7.6x Telco Leverage)
Fully Financed Financing Uncommitted Financing
Mobile Technology / Operational Leader Mobile Expertise None
5
SoftBank Transaction is Superior
SoftBank dish
Global Scale / Expertise Synergies Unfounded / Unrealistic
Proven Track Record Partnering Litigation History
Shareholder Protections Governance Ergen-dominated
Efficient Tax Inefficient
Well-positioned Spectrum Significant Costs
6
Value per Share
(Pre Synergies)
7
SoftBank $8bn Primary Investment
$3.1bn in October 2012 Convertible debt at $5.25 per share
$4.9bn in July 2013 Primary investment at $5.25 per share
8
Value per Share SoftBank
(Pre Synergies)
$ 6.38 Transaction value
Equity $ 2.35*1
Cash $4.03*2
Cash+New Sprint Equity
*Assumed pro rata subscription to cash and equity; shareholders will have the option to elect between cash and equity
*1 $5.25 per share and 0.448 exchange ratio
*2 $12.1bn to purchase 1,663mm shares at $7.30 per share
9
DISH’s Proposal Value dish
(Pre Synergies)
$ 7.00
Equity $2.24
Cash $4.7
Proposal Value per DISH Presentation*1
*Created by SoftBank based on respective companies’ publicly available information.
*1 Based on proposed 0.05953 proposed exchange ratio and DISH share price as of 4/12/2013.
10
Financing Dilution dish
$ 7.00 $ (0.25)
Adjusted for:
New DISH share dilution $9.3bn incremental debt $7.9bn cash outlay
Proposal Value per DISH Presentation*1
Financing Dilution*2
*Created by SoftBank based on respective company’s publicly available information.
*1 Based on proposed 0.05953 proposed exchange ratio and DISH share price as of 4/12/2013.
*2 Includes Sprint market value as of 4/12/2013. Includes $9.3bn of new debt and $7.9bn cash outlay.
11
Adjusted Proposal Value
dish
(Pre Synergies)
$ 7.00
$ (0.25)
$ 6.75
Proposal Value per DISH Presentation*1
Financing Dilution*2
Adjusted Proposal Value
*Created by SoftBank based on respective company’s publicly available information.
*1 Based on proposed 0.05953 proposed exchange ratio and DISH share price as of 4/12/2013.
*2 Includes Sprint undisturbed market value as of 4/12/2013. Includes $9.3bn of new debt and $7.9bn cash outlay.
12
Transaction Fees and Expenses
dish
$ 6.75
($0.09)
$600mm break-up fee $400mm transaction expense
Adjusted Proposal Value
Transaction Fees and Expenses*1
*Created by SoftBank based on respective company’s publicly available information.
*1 Includes $600mm breakup fee paid to SoftBank by Sprint and $400mm of assumed transaction fees.
13
Time Value Discount
dish
$ 6.75
($0.09)
($0.61)
1 year delay in closing
Adjusted Proposal Value
Transaction Fees and Expenses*1
Time Value Discount *2
*Created by SoftBank based on respective company’s publicly available information.
*1 Includes $600mm breakup fee paid to SoftBank by Sprint and $400mm of assumed transaction fees.
*2 1 year discount period for DISH proposal relative to SoftBank transaction.
Time value adjustment applied to Adjusted Headline Value, Transaction Fees and Expenses.
14
Timing
SoftBank
July 1, 2013 Expected Close
dish
. . . ?
Delay in NW Vision
Lose Competitiveness
Today
2012
2013
2014
15
Present Value per Share
dish
(Pre Synergies)
$ 6.75
($0.09)
($0.61)
$ 6.05
Adjusted Proposal Value
Transaction Fees and Expenses*1
Time Value Discount *2
Present Value Pre Synergies
*Created by SoftBank based on respective company’s publicly available information.
*1 Includes $600mm breakup fee paid to SoftBank by Sprint and $400mm of assumed transaction fees.
*2 1 year discount period for DISH proposal relative to SoftBank transaction.
Time value adjustment applied to Adjusted Headline Value, Transaction Fees and Expenses.
16
SoftBank Transaction is Superior
(Present Value, Pre Synergies)
$ 6.38
+5%
$ 6.05
SoftBank
dish
17
Value per Share
(Post Synergies)
18
Synergies
dish
$ 6.05
$ 0.75
$11.0bn NPV of cost synergies
Less $2.6bn NPV of integration expenses Limitations / 2 separate companies
Present Value
Synergies*1
*Created by SoftBank based on respective company’s publicly available information.
*1 Assumes DISH cost synergy NPV of $11.0bn per DISH presentation less $2.6bn NPV of integration costs per average of industry transactions.
19
Spectrum Deployment Cost
dish
$ 6.05
$ 0.75
($ 0.47)
$6.0bn CAPEX to deploy 2GHz
Non-standard; no ecosystem No compatible handsets No revenue prospects
Present Value
Synergies*1
Spectrum
Deployment Costs *2
*Created by SoftBank based on respective company’s publicly available information.
*1 Assumes DISH cost synergy NPV of $11.0bn per DISH presentation less $2.6bn NPV of integration costs per average of industry transactions.
*2 Assumes $6bn of spectrum build out costs over 3 years discounted at 10%.
20
Present Value per Share
dish
(Post Synergies)
$ 6.05
$ 0.75
($ 0.47)
($ 0.03)
$ 6.31
Present Value
Synergies*1
Spectrum *2
Deployment Costs
Time Value Discount *3
DISH Proposal Value
*Created by SoftBank based on respective company’s publicly available information.
*1 Assumes DISH cost synergy NPV of $11.0bn per DISH presentation less $2.6bn NPV of integration costs.
*2 Assumes $6bn of spectrum build out costs over 3 years discounted at 10%.
*3 Time value adjustment applied to synergies, Spectrum Deployment Costs.
21
$2.0bn Annual Cost Synergies
SoftBank
$ 6.38
$ 1.27
Handset / Equipment / Network / IT / OPEX No material redundancies
Cash+New Sprint Equity*1
Synergies*2
*Created by SoftBank based on respective company’s publicly available information.
*1 Transaction Value delivered to Sprint Shareholders based on SoftBank transaction.
*2 Assumes $2.0bn run-rate cost savings and efficiencies under SoftBank management, tax-effected using 35% rate and discounted at 10%.
22
$2.0bn Annual Cost Synergies
Economies of Scale
Smartphone
SAMSUNG
hTC
MOTOROLA
Network
ERICSSON
Alcatel-Lucent
SAMSUNG
Operational Expertise
Mobile EBITDA
$7.8bn
vodafone
SoftBank
2004/3
’13/3 (FY)
*Assumes $2.0bn run-rate cost savings and efficiencies under SoftBank management.
23
Global Procurement Scale
(m)
Number of Smartphones Sold
28.8
26.9
26.5
13.3
5.6
Verizon
AT&T
Sprint / SoftBank
NTT DOCOMO
KDDI
Competitive Economies of Scale
*Others: FY2012 results
*KDDI: FY2011 results
24
Global Procurement Scale
($ bn)
Mobile CAPEX
20.4
11.9
10.8
9.9
8.9
7.5
3.0
China Mobile
Sprint /
AT&T
Vodafone
Verizon
NTT
KDDI
SoftBank
(Consolidated)
DOCOMO
Economies of Scale Global No. 2
*Vodafone, KDDI: FY2012/3 actual results Others: FY2012 actual results
*Created by SoftBank based on respective companies’ publicly available information.
25
Planning meetings
26
SoftBank
Present Value per Share
(Post Synergies)
$7.65
$6.38
$1.27
Cash+New Sprint Equity*1
Synergies*2
SoftBank Transaction
Value
*1 Transaction Value delivered to Sprint Shareholders based on SoftBank transaction.
*2 Assumes $2.0bn run-rate cost savings and efficiencies under SoftBank management, tax-effected using 35% rate and discounted at 10%.
27
SoftBank Transaction
Provides 21% Premium
SoftBank
$7.65
+21%
$6.31
dish
SoftBank Transaction Value
DISH Proposal Value
*Created by SoftBank based on respective companies’ publicly available information.
28
Value per Share
SoftBank
$ 6.22
$ 6.38 (+5%)
$7.65 (+21%)
DISH Presentation
Pre Synergies
Post Synergies
dish
$ 7.00
$6.05
$6.31
29
Capital Structure & Governance
30
Superior Capital Structure with SoftBank
SoftBank *1
Sprint Clearwire
Net Leverage
3.0x
$ 22.6bn
Pro Forma Gross Debt
dish *2
Sprint Clearwire
Net Leverage
5.9x
Gross Leverage
7.6x
$ 35.3bn
Sprint Silo
Pro Forma Gross Debt
Gross Leverage
6.0x
$ 14.2bn
DISH Silo
Pro Forma Gross Debt
*Created by SoftBank based on respective companies’ publicly available information. Excludes SoftBank financial results.
*1 Pro Forma for Clearwire; excludes synergies.
*2 Pro Forma for Clearwire and includes $600mm of break-up fees; excludes synergies.
31
Superior Capital Structure with SoftBank
SoftBank *1
Sprint Clearwire
Net Leverage
3.0x
$ 22.6bn
Pro Forma Gross Debt
dish *2
Sprint Clearwire
Net Leverage
5.9x
Gross Leverage
7.6x
Gross Leverage
6.0x
$50bn
Pro Forma Gross Debt
*Created by SoftBank based on respective companies’ publicly available information. Excludes SoftBank financial results.
*1 Pro Forma for Clearwire; excludes synergies.
*2 Pro Forma for Clearwire and includes $600mm of break-up fees; excludes synergies.
32
Increased Financial Risk
Net Debt / EBITDA Multiple
dish (DISH/Sprint)
T-Mobile Metro PCS
SoftBank (Sprint)
AT&T
Verizon
5.9x
3.4x
3.0x
1.8x
1.2x
Highest Telco Leverage Ratio in the World
33
Poor Governance dish
Economic Interest
32% DISH Shareholders
32% Sprint Shareholders
36% Ergen
Voting Control
DISH Shareholders
Sprint Shareholders
7.5% 7.5%
85% Ergen
*Created by SoftBank based on respective company’s publicly available information.
*Ergen includes Ergen Trust.
34
SoftBank Will Propel
Sprint’s Growth
35
“Our track record of innovation and operational excellence will drive Sprint shareholder value.”
-Masayoshi Son (October 15, 2012)
36
“ I’m not an expert on their Network Vision…
They certainly have more expertise in that than we do. “
- Charles Ergen
(April 15, 2013)
37
DISH Losing US TV Battle
dish DIRECTTV.US
14.1mm Subscribers 20.1mm
$14.3bn Total Revenue*1 $23.2bn
17% EBITDA Margin*1 24%
*Created by SoftBank based on respective companies’ publicly available information.
*1 FY2012 reported revenue and EBITDA margin.
38
Smartphone is the Key to Success
Google™
SoftBank
SAMSUNG
ERICSSON
QUALCOMM
Alcatel-Lucent
Intel
Nokia Siemens Networks
dish
39
No.1 in Smartphone Sales
SoftBank
SoftBank
NTT DOCOMO
Au
(CY)
’09
’10
’11
’12
’13
dish
None
(CY)
’09
’10
’11
’12
’13
40
Mobile EBITDA Growth Rate (FY2012)
SoftBank
Verizon
AT&T
China Mobile
NTT DOCOMO
(1%)
Vodafone
(8%)*1
DISH
(39%)*2
+14%
+12%
+7%
+1%
Global No.1
*Created by SoftBank based on respective companies’ publicly available information
*1 Consolidated EBITDA
*2 Consolidated EBITDA for total operation : Net Income + Income tax (provision) benefit, net + interest expense, net + depreciation and amortization
41
Mobile EBITDA Margin (FY2012)
SoftBank 50%
China Mobile 48%
Verizon 47%
NTT DOCOMO 42%
AT&T 39%
Global No.1
Vodafone 33%*1
DISH 17%*1
*Created by SoftBank based on respective companies’ publicly available information.
Mobile EBITDA margin = Mobile EBITDA/
Mobile Telecom Service Revenue
*1 Consolidated EBITDA Margin for total operations
42
Subscribers
SoftBank
(m)
45
dish
41.9m
vodafone
Rapid Growth
30
15.0m
15
0
2004/3’05/3
’06/3
’07/3 ’08/3 ’09/3 ’10/3 ’11/3
’12/3 ’13/3 (FY)
(m)
45
30
No Growth
15
14.1m
9.4m
0
’03/12’04/12’05/12’06/12’07/12’08/12’09/12’10/12’11/12’12/12
(FY)
*SoftBank Mobile: Sum of SoftBank Mobile, Willcom, and EMOBILE’s accumulated subscribers
*Pay-TV subscribers
43
EBITDA
($ bn)
SoftBank
7.8bn
(margin 50%)
8.0
vodafone
Turnaround
6.0
4.0
2.0
2004/3’05/3
’06/3
’07/3 ’08/3 ’09/3 ’10/3 ’11/3 ’12/3
’13/3
(FY)
* EBITDA of mobile communications segment
dish
($ bn)
8.0
6.0
Peaked
4.0
2.4bn
(margin 17%)
2.0
2003/12’04/12 ’05/12 ’06/12 ’07/12 ’08/12 ’09/12 ’10/12 ’11/12 ’12/12 (FY)
*Consolidated EBITDA for DISH : Net Income + Income tax (provision) benefit, net + interest expense, net + depreciation and amortization
44
SoftBank Transaction is Superior
SoftBank
dish
$ 7.65 (+21%)
Value
$6.31
July 2013
Timing
Mid 2014
3.0x
Leverage
5.9x
Straightforward
Structure
Separate Silos
(7.6x Telco Leverage)
Fully Financed
Financing
Uncommitted Financing
Mobile Technology / Operational Leader
Mobile Expertise
None
45
SoftBank Transaction is Superior
SoftBank
dish
Global Scale / Expertise
Synergies
Unfounded / Unrealistic
Proven Track Record
Partnering
Litigation History
Shareholder Protections
Governance
Ergen-dominated
Efficient
Tax
Inefficient
Well-positioned
Spectrum
Significant Costs
46
SoftBank Transaction Provides 21% Premium
SoftBank dish
$7.65
+21%
$6.31
SoftBank
Transaction
Value
DISH
Proposal
Value
*Created by SoftBank based on respective company’s publicly available information.
47
SoftBank + Sprint® ™
Positioned for Growth
Copyright (C) 2013 SoftBank Corp., All rights reserved.
48