Deals Rumor Mill: SoftBank, NBA, Nasdaq

By Benjamin Horney
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Law360 (May 21, 2020, 4:34 PM EDT) -- The deals rumor mill is often overflowing with transactions that are reportedly close to being inked, but with so many rumors it can be hard to know which ones to stay on top of every week.

Here, Law360 breaks down the deal rumors from the past week that you need to be aware of.

SoftBank Considers Partial Sale of T-Mobile Stake

SoftBank Group Corp., is potentially planning to sell a large portion of its stake in T-Mobile US Inc., the Wall Street Journal reported on Monday. According to the report, SoftBank — which earlier this week unveiled billions of dollars of overall losses on its investments during the fourth quarter of last year — is in talks to sell a major chunk of its stake in T-Mobile to Deutsche Telekom AG, which already owns a 44% stake in the business. SoftBank's total stake is 25%, the report said, and T-Mobile has a current market value of about $120 billion. Any deal would increase Deutsche Telekom's stake to above 50%, the report said.

Dyal Capital Seeks $2B to Buy Minority Stakes in NBA Teams

Dyal Capital Partners intends to raise $2 billion in initial capital for a fund that will buy minority stakes in teams that are in the National Basketball Association, according to a Tuesday report from Barron's. According to the report, Dyal recently started reaching out to potential investors, and a first close for the fund is expected to take place this summer. It's not clear how much Dyal will ultimately aim to raise for the fund. Dyal Capital declined to comment on the rumored fundraise, although it did confirm that it was recently chosen by the NBA to be the sole approved partner to purchase stakes in teams. Michael Rees, head of Dyal Capital, said in a statement that "we're grateful for the unanimous vote of the 30 team owners to give us this opportunity to be the only institutional investor eligible to pursue this strategy in partnership with the league." The agreement with the NBA is part of a larger effort from Dyal to tap into the professional sports world, with Rees saying the firm plans to "build a broader Dyal sports investing business that will span to additional leagues."

Nasdaq to Unveil New Rules That Will Hamper Chinese IPOs

Nasdaq Inc. is expected to post new restrictions on initial public offerings that, while not explicitly aimed at Chinese companies, will make it difficult for some businesses based in China to debut on the stock exchange, according to a Monday report from Reuters. According to the report, Nasdaq will not specifically denote that Chinese companies are the target of the new restrictions, but the changes are being made in large part because of "concerns about some of the Chinese IPO hopefuls' lack of accounting transparency and close ties to powerful insiders." Among the new rules will be one mandating that companies from certain countries, including China, raise either at least $25 million or at least a quarter of their post-listing market capitalization in their IPOs, the report said.

Chinese Car Rental Service Connected to Embattled Coffee Chain Seeks Capital

UCAR Inc., which provides car rental services in China and was founded by an executive of embattled Chinese coffeehouse chain Luckin Coffee Inc., is looking for a cash injection, according to a Wednesday report from Reuters. According to the report, the company, founded by Charles Lu, is seeking to accumulate capital through the sale of a 1 billion yuan ($141 million) limited partner interest in a fund managed by Centurium Capital that owns a 30.75% limited partner interest in UCAR. The rumor comes as Luckin Coffee, for which Lu serves as non-executive chairman, is embroiled in controversy. The company revealed earlier this week that Nasdaq planned to delist its stock after Luckin Coffee announced in April that it believed Chief Operating Officer Jian Liu and employees under him fabricated as much as $310 million in sales last year.

Italy Plans €44B Fund to Protect Its Cos. Amid Coronavirus Chaos

The Italian government is forming a planned €44 billion ($48.2 billion) vehicle that will have at least €4 billion in initial funds to invest in the country's core companies that have been rocked by the coronavirus pandemic, according to a Thursday report from Reuters. According to the report, the fund is meant to protect Italian from predatory foreign investment. It will have the ability to invest in Italian companies that are outside the financial sector and have revenues of more than €50 million. The fund will be managed by state-run lender Cassa Depositi e Prestiti, the report noted.

Italian Payments Cos. Consider Merger

SIA SpA is in discussions to merge with larger rival Nexi SpA in a deal that would create one of the largest payment services in Europe, according to a Thursday report from Bloomberg. According to the report, the two Italian companies have been considering such a deal on and off for over a year, and talks recently picked back up. Everything is still preliminary, the report cautioned. Reports in February said that SIA was hiring advisers for a planned stock exchange listing in Milan worth up to €1.5 billion.

--Additional reporting by Deal Seal. Editing by Alanna Weissman.

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