Why Sprint Is Planning a T-Mobile Bid

Your next video will start in

Recommended Videos

  • Info

  • Comments


April 30 (Bloomberg) -- Sprint Corp. plans to push forward with a bid for T-Mobile US Inc. after meeting with banks this month to make debt arrangements for that offer, people with knowledge of the situation said. Alex Sherman reports on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

From los angeles is alec sherman.

What do we know so far, alex, about sprint and t-mobile?

We know there was a meeting earlier this month, the first week of april, where the sprint cfo and their treasurer met with six different banks, including goldman sachs, deutsche bank, bank of america, citigroup, to plan out various different structures for a deal for t-mobile.

A sickly, sprint said we are not ready to announce something at, -- basically, sprint said we are not ready to announce something yet, but if and when we are, you guys need to be ready with a financing.

That was sort of the general topic outline of the meeting.

Alec sherman, what has been some of the specific challenges for sprint mounting a deal for t-mobile?

The biggest one is regulatory.

They have spent the last several months talking to regulators.

He was in washington for a decent stretch of time, trying to plead his case to allow this deal.

So the fcc and the department of justice would basically look at this and say we are going from four large wireless players to three, why should we do it?

It could be anticompetitive for diminishing competition.

The biggest challenge for the ceo who owns 80% of sprint is they are looking at this wrong, the wireless industry is really a doo-wop delay, just at&t and verizon that dominate and long-term sprint and t-mobile have no way to compete and the only way we can be consumer friendly is to have three strong players rather than two strong ones and two weak ones.

That is the biggest hurdle to the deal and there's nothing out there to indicate he has been successful in convincing regulators of this argument.

Nevertheless, what we're hearing see plans on pushing forward with the deal, putting something in front of regulator so they have to decide.

Alex, what about value?

Is there a number being talked about?

T-mobile trading at about $30 per share.

From what i have heard, the ceo is looking at offering perhaps a little more, a higher premium, may be in the high 30's for a deal, pushing down the termination fee, reverse termination fee if he can.

That would be the structure that he would eventually like to pursue.

For people who follow this industry, at&t paid about $6 billion in reverse fees when they tried to buy t-mobile back in 2011. that was a windfall for t-mobile when regulators rejected the deal.

What mayoshi is concerned about is if the fee is too high it may incentivize regulators to reject the deal because by doing so they would strengthen t-mobile and therefore generate

This text has been automatically generated. It may not be 100% accurate.


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change