8-KRegulation FD

T-Mobile US, Inc. 8-K Report, Regulation FD Disclosure (Feb 2, 2021)

Filed February 2, 2021For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. (TMUS) has provided an update on the valuation process for Shenandoah Personal Communications LLC's (“Shentel”) wireless telecommunications assets. T-Mobile, through its subsidiary Sprint PCS, exercised its option to purchase these assets in August 2020. Following a dispute resolution and the selection of independent valuation providers, the 'Entire Business Value' of these assets has been determined to be $2.10 billion. The base purchase price for these assets will be 90% of this valuation, amounting to $1.89 billion, subject to further purchase price adjustments. The parties are currently negotiating the definitive agreement for this transaction, with an expected closing in the second quarter of 2021, contingent upon customary closing conditions. This acquisition is part of T-Mobile's strategy to consolidate its network and service areas.

Key Highlights

  • 1T-Mobile exercised its option to acquire Shentel's wireless telecommunications assets in August 2020.
  • 2The 'Entire Business Value' of Shentel's wireless telecommunications assets has been determined to be $2.10 billion.
  • 3The base purchase price for the assets is set at $1.89 billion (90% of the Entire Business Value), subject to adjustments.
  • 4A dispute regarding valuation framework items was resolved, allowing the valuation process to commence.
  • 5The valuation process was conducted by three independent valuation providers as per the Management Agreement.
  • 6T-Mobile and Shentel are currently negotiating the final terms of a definitive agreement.
  • 7The transaction is expected to close in the second quarter of 2021, pending customary closing conditions.

Frequently Asked Questions

T-Mobile is acquiring Shentel's wireless telecommunications assets used to provide Sprint PCS mobility communications network products in specific regions of Maryland, North Carolina, Virginia, West Virginia, Kentucky, Ohio, and Pennsylvania.

The purchase price is based on a 90% of the 'Entire Business Value' determined by independent valuation providers. The 'Entire Business Value' was calculated at $2.10 billion, making the base purchase price $1.89 billion, with potential adjustments.

The transaction is expected to close in the second quarter of 2021, provided that all customary closing conditions are met and the definitive agreement is finalized.

Yes, Shentel initially delivered a 'Notice of Dispute' related to valuation framework items and other contractual terms. However, the parties have since resolved this dispute and agreed on terms for the appraisal framework.