Simpson Thacher is representing Virgin Mobile USA, Inc. in connection with its proposed sale to Sprint Nextel Corporation in a stock-for-stock transaction valued at approximately $796 million.
Virgin Mobile's public shareholders will receive Sprint shares equivalent to $5.50 per Virgin Mobile share, subject to a collar of 1.0630 to 1.3668 Sprint shares per Virgin Mobile share. The price is a 31 percent premium over Virgin Mobile's current stock price. The exchange ratio for Virgin's significant stockholders Virgin Group and SK Telecom will be equal to 93.09% and 89.84%, respectively, of the exchange ratio for the public stockholders. Sprint also agreed in the transaction to continue to license the Virgin Mobile USA brand from the Virgin Group and agreed to payoff Virgin Mobile's obligations under the terms of the Company's existing Tax Receivable Agreement, Senior Secured Credit Facility and Related Party Subordinated Secured Revolving Credit Agreements.
Virgin Mobile USA, Inc. [NYSE:VM] offers more than 5 million customers pre-paid and pay-as-you-go service plans with coverage on Sprint's Nationwide Network.
The closing of the transaction is subject to the approval of Virgin Mobile’s stockholders and other customary closing conditions, including regulatory approvals. The merger is expected to close in the fourth quarter of 2009.
The Simpson Thacher attorneys working on the deal are: Alan Klein, Joel Karansky, Adam Booken and Nick Ferrer (M&A); John Creed, Nancy Mehlman and Kurt Dudas (Tax); Brian Robbins, Jamin Koslowe and Eric Sarabia (Executive Compensation and Employee Benefits); William Sheehan and Kevin Rubinstein (Finance); Lori Lesser and Genevieve Dorment (Intellectual Property); and Michael Naughton (Antitrust).