SoftBank: Sprint to the finish When SoftBank's Masayoshi Son bid for Sprint Nextel last October, his bondholders and shareholders swooned. Now that the Japanese telecoms group has sweetened its deal by $1.5bn, markets barely blinked. Mr Son has done a good job of selling his investors on his biggest and boldest acquisition yet. But they seem to be missing something, too. Mr Son has added $1.5bn to his $20.1bn first offer. It still sounds like a steal compared with the $25.5bn rival offer made by Dish Networks. But under the revised offer, Sprint shareholders receive an extra $4.5bn in cash, $3bn of which is taken from the $8bn capital expenditure SoftBank had planned for Sprint. In return, SoftBank takes 78 per cent, not 70 per cent, of Sprint's equity. At least raising the ownership makes the answer to this question even simpler: who will replace the $3bn capex shortfall? Sprint certainly needs funds for its wireless network after years of being outgunned. In the decade to 2012, it spent about half as much as either Verizon or AT&T on wireless capex, according to HSBC. And as its woes deepened, that dropped to about a quarter. SoftBank says synergies found during due diligence justify the $3bn capital cut. But Mr Son highlighted his telecoms knowhow during the bid battle, so being more than a third out in his initial assessment of Sprint's needs is hard to swallow. SoftBank's net debt to earnings before interest, tax, depreciation and amortisation would have risen from about 1.5 times to a little more than 3 after the original deal. The revised offer will add about 0.5 to that, according to Nomura. That is high, if do-able. Memories of SoftBank's painful 5 times-plus net debt to ebitda ratio following previous deals worried its backers when the Sprint deal was first mooted. As it stands, they need not worry, unless the $3bn of capex is in fact as necessary as SoftBank first thought it was.